[New UK France Tax Treaty In Force]

To answer your latter post. Quite a lot of questions, the quote thing doesn't seem to work.

Does France charge CGT on UK properties? (for French residents)

Under the old convention, no. Under the new one, yes.

Does UK charge CGT on these properties?

No - the UK does not charge CGT to non-residents. The treaty allows it, but they don't. It's not just a UK France thing the UK doesn't charge any non-resident.

Does it not just invite the UK to charge CGT to non-residents?

No. That's matter of UK policy - nothing specific to this convention.

[New UK France Tax Treaty In Force]

[quote user="Debra"]OK I tried reading it anyway but can't figure it out really.  It still says gains from immovable property are taxed by the 'contracting state' they are located in.  It also says that if the law of the contracting state allows, they will be taxed by the contracting state of residence if the person has been resident in the last six years or is currently resident.  Then there are bits about who gets first bite and handles the double taxation part. 

So does France already have a law that immovable property elsewhere can be taxed by them and the UK doesn't have that rule and was this rule somehow negated in the old treaty but given full reign in the new one?  If so, I expect the UK will soon have that rule also.  If not, surely there is no change via this treaty, only if the relevant contracting states have such laws or implement them? 

Sorry if I'm being dim but I understood all this ages ago when it was first being discussed and seem to have lost that little store of knowledge somewhere along the way.......

[/quote]

There is a subtle but important error in what you write.

The convention does not state that gains from immovable property are taxed .. etc.

The convention states that gains may be taxed...etc

And the UK does not currently tax gains on non-residents.

[New UK France Tax Treaty In Force]

The UK doesn't charge CGT on UK property to non-residents.

[New UK France Tax Treaty In Force]

And if sweet17 had simply pointed it out with a simple reply along the lines of "I think you meant rent 'out'" rather than give me a condescending definition of what rent means then that would have been been the end of the episode.

I'm sorry I attempted to give some advice. I shan't bother again.

[New UK France Tax Treaty In Force]

Well I didn't see any humour in your criticism. If you're claiming not to be smart don't act like a smart arse.

[New UK France Tax Treaty In Force]

[quote user="parsnips"]

Hi,

 To sum up, provided french rules don't change, you will not be liable to french CGT on the UK house ,whenever you sell it.

  At present the UK does not tax non-residents on the sale of UK sited real estate. However, there seems to be (in the new treaty) a possibility that you might become subject to UK CGT on the sale of the UK house, if you became UK resident again within 5 years of the sale. The relevance of this will become clearer with the passing of time and some case histories. 

[/quote]

The five year 'temporary non-residence' rule has been around for a while now and is not new to the new treaty. Indeed it's not really to do with the UK France tax treaty as it does not matter which country you return from. What it does mean is that if your French tax were nil then you would be subject to a UK tax liability should the situation arise. Although previous periods of primary residence plus the last three years are excluded from the gain, so the likelihood is that it wouldn't be very much.

[New UK France Tax Treaty In Force]

Technically you are correct, I should have written rent 'out', but I inadvertently omitted the word 'out'. Since the reply was in direct response to a question about renting out a UK property and it's pretty obvious for normal people that you wouldn't live permanently in France and PAY to rent a property in the UK then it doesn't require too much intelligence to work it out.

But it's nice to be reminded every now and again that it's often not worth bothering to dispense sound advice on these forums as there's always someone trying to prove how smart they are.

[New UK France Tax Treaty In Force]

[quote user="Loire"]I'd be grateful if someone could confirm that I have understood correctly the situation as regards capital gains on my uk property under the new French law. Any light than can be shed on my situation as far as uk capital gains goes would also be gratefully received.

I'm a uk resident with my main home there, which I have owned for 15 years in September. I have a second home in France. I should like to become a French resident this tax year, and live all the time in my house in France. If I rent out my uk property, then later sell it, when I sell it, the question of French capital gains tax will arise. Even if I were renting it out, is it the case that if I sell it after 15 years, I have no capital gains liability in France? (If anyone knows whether I would be liable for any uk capital gains tax as it would no longer be my main residence, I'd be very grateful - my call to the tax office was, shall we say, unelightening.)

If I were to sell the uk property, probably before September, and become a French tax resident immediately after, would I still have no capital gains liability? Would the same apply if I were to put it on the market immediately after becoming a French resident? My understanding, but might need to be corrected, is that I wouldn't have such a liability.

My understanding is that if I do rent out my uk home, social charges might be payable in France on the rental income. I've seen conflicting reports on whether or not they would. Anyone able to clarify please?

Thanks very much.

Kind regards

Loire[/quote]

As you have owned your UK property for over fifteen years then you will have no liability if you sell it whilst French resident.

Bear in mind that there was some serious discussion last year about scrapping the fifteen year exemption. It wasn't adopted for this year but it could be a possibility in future years.

If you rent your UK house then it is not taxable in France. It is taken into account for the 'taux effectif' but it is not taxable and therefore does not attract social charges.

[New UK France Tax Treaty In Force]

[quote user="Andy81"]Hi Andyh4,

Yes woke up at 3am yesterday wondering about the not letting it out option! Then again how long do you have to leave it vacant before you can claim it as your "residence principale" 6 monts, 1 year...? As it is curently worded,

if there are no tenants in the flat, it is available to me and in such a case it is up to me to elect which is my residence principale, despite the fact I live and work in France and my residence principale is blatantly my french one ( though I am not owner this seems to count for nothing!) Thanks for the replies re. rental income income...bit of a bummer if I declare them as I will go up a "bareme" on my tax declaration!

Thinking about going to see a tax inspector at the hotel des impots but have a feeling I would be putting myself into "la guele du loup" as someone put it to me today! Apparently they dont let go once they get a grip of you, probably best to wait and see. Like someone stated, I have done a lot of work on my property in UK, how is that factored? Seems a nightmare. Best option will be "residence principale" or waiting 15 years as far as I can see. Just need some definitive info. on the "residence principale" bit!

Cheers, Andy.[/quote]

If you live in France you cannot claim your UK property as your principal residence, whether it is rented out or not.

You cannot elect your principal residence. That is under UK tax law, but as you live in France then it is French tax law that determines your principal residence and that is straightforward - your house in France.

[New UK France Tax Treaty In Force]

They want to fiond out if they can consider you UK resident. As you have not spent much time there then you will be fine.

[New UK France Tax Treaty In Force]

I'm guessing but I would have thought that whatever pre-relief gain calculated under Uk rules is the gain that is declared in France.

That's how it works the other way around isn't it?

[Capital gains tax on UK property]

Yes. With the implementation of the new UK France tax treaty then you would be liable to French tax on the sale of your UK house. However, as you bought the house in 2007 the value may not have risen much, if at all.

[New UK France Tax Treaty In Force]

You will find the announcement and the treaty on the HMRC website, or try google for that and other discussions on implications.

[New UK France Tax Treaty In Force]

The 2008 treaty is now in force and therefere will apply in France for the tax year 2010 and in the UK for 4/2010- 4/2011.

[Capital gains tax on UK property]

I haven't checked recently but the last time I did (a couple of months ago) I understood that the latest treaty had been ratified in the UK but not yet in France. As I understand it the treaty comes into force in the tax year following the tax year in which it is ratified. And both countries need to ratify it, obviously.

The 15 year rule would mean CGT would be exempt in France. I don't therefore see how they could apply social charges.

I wouldn't wait for the French authorities to post guidance. I would assume that in France as in the Uk igorance of the law is no excuse, with or without guidance.

[Capital gains?]

I believe I know where this came from - there used to be a two year rule, but it changed some years ago now to the 'habitual residence' wording.

[learning to read]

I agree with the experts' comments. Our boy started learning to read in CP and was reading by half-term. Our girl is making good progress in CP and will certainly be reading by Christmas. However, there is a lot of preparatory work that goes on before CP. I suspect that if they hadn't attended maternelle (although this would be unusual) then that would not be the case.

[If you had to travel to India, how do you plan your trip]

The answer to your question is I would buy a guidebook. Almost certainly the excellent Handbook series by footprint. Otherwise LP and Rough guides.

I have travelled all over the world, including India. It's one of the most fascinating and rewarding places to visit.

[Setting up a website for gite rental]

I designed my website using moonfruit. I had no prior experience, but I'm told it's not bad. The nice thing about them is you can design a 5 page website for nothing, so you can do a trial run. A lot of the free trials want your credit card details up front and cancelling is a pain.

[Moving to France with an infant.]

Healthcare in France is among the best in the world, maybe the best. It is much better than the UK.

I presume you have researched your entitlements to the system and will be applying for an E106.

[Perseid meteor shower]

Look to the North-East just below Cassiopeia. It's not really worth watching after the moon gets up too high. I saw a good dozen last night in an hour or so around midnight.

[website photos]

Thanks for the comments and for all those people who took the time to look at the website yesterday.

I like the comment about the cushions. A woodburner is now in the hearth and that's one of the photos that need to be changed.

There isn't much in the way of flowers outside - the soil is very thin in parts, but I do intend to plant a few naturalistic borders with grasses. I prefer a natural look to geraniums, etc.

The cottage looks as it looks - it's a very old building and that's the way it was built. I think most people find it attractive but I'm aware that some won't - so in that regard the photography on the website is achieving its aims.

[tax on property in the UK]

There is misconception in this thread.

Rental income from UK property is taken into account in France to determine tax rates on other income BUT it is not subject to social charges.

[French resident, 2nd home in the UK >>>> implications on capital gains tax]

The lady who prepares your tax return is clearly not qualified to give you tax advice.

If you stay away from the UK for more than five full tax years then, upon taking up UK residency again, you won't have any UK CGT implications on UK property disposed of within this period.

There will be French tax implications once the new treaty is implemented (2010 very likely) - your UK property will be subject to French tax (potentially ouch). So unless you have owned it for a lot longer or the house is sold without much gain (a distinct possibility with current conditions) then you will need to plan for this.

Much really depends on what your intentions are regarding future ownership of the house and whether you are prepared to make decisions about your life based on tax planniong or whether you would just pay whatever tax is generated by your personal circumstances.

I have an observation regarding the transfer of ownership of the house. As your mother lives there rent free then this could well be a gift with reservation of benefit for inheritance tax purposes. In which event the seven year rule would not commence from the date of transfer.

[website photos]

Some photos can be too clever. I've seen small pools made to look enormous with a wide angle lens.

I have tried to be honest with the photos on my gite website. I now there are some improvements to be made but in general I think they portray the cottage realistically.

I do like using a letterbox format - I think it transforms an ordinary photo into something a lot more striking.