Malaucene

Hi, I have seen various conflicting opinions on this so this morning I phoned the UK Inland Revenue non residents dept at  Bootle (00441514726009). They advised that when the new treaty comes into force capital gains on the sale of UK property owned by a French resident will be taxed in France but rental income would still be dealt with in the UK.

There is still a loophole between UK/France on capital gains for a French resident when selling a property in the UK and on rental income from a UK property. Rental income is taxable in the UK but personal allowances can be set agaist this. The French cannot tax this income. Capital gains on the sale of a UK property by a French resident is not taxable in the UK nor is it taxable in France. However a new UK/France Double Taxation Treaty was signed on 19 June 2008 and should come into force in 2009 (for details of this google new UK/France Double Taxation Treaty). This treaty will allow The French to tax any capital gains on the sale of a UK property and it appears to me, that in the case of rental income in the UK, this will not be taxable in the UK but will be taxable in France, This change on rental incomes, if correct, will be expensive as you will not be able to set your personal allowance against such tax in France and the tax in France for rental income can be expensive .