Selling Our B&B Very Confused!!

[Rob101]

Hi All,

Can I just apologise firstly if I have put this item in the wrong section, its my first post ever on a forum and also if I am waffling as I feel like I have 20 questions.

We have a 5 bedroom Chambre D'Hote in France and we have been trading for about a year but have owned the property for 19 months.

Due to circumstances beyond our control, we are having to sell our B&B  & are extremely confused about how the best way to go about this would be, we are in no major rush to sell but we are putting the property on the market in the very near future.

We have to keep trading the B&B until we sell as it is our income and we have lots of bookings for the rest of the year, however , we do not want to get stung financially by doing this as someone told us that we will end up paying a significant amount of taxes when we sell if we sell it as a going concern.

How long would we have to be deregistered for (we are fully registered with siret number) so we do not have to pay out significant charges. We are happy to pay tax on the earnings we have made but dont understand why we should have to pay yet more charges as the only reason we will trade up till we sell is not so we can sell the property for more than we would sell it for if it was not a B&B. But obviously the property may sell quickly or may take some time so we cannot rely on this with no income coming in.

Also would we have to be paying some form of capital gains tax on the property sale as we have owned for less than 2 years even though it is our only residence.

Finally does anyone have any suggestions where the best place to advertise our property would be as we wish to do it as a private sale.

I am sorry for the long winded message, but am just a bit confused.

Thanks in advance

[Rob Roy]

What area of France are you in Rob101? It might help to know for your advertising.

[Rob101]

Hi Rob Roy

We are based in the Indre region.

[Gastines]

Re the Commercial Tax payable if you sell as a going concern,you may do well to ask your Notaire,or two, for the correct version. It seems to vary area to area and Notaire to Notaire. We were told by one Notaire that we had to cease trading for a complete year,which we have done,otherwise we would be liable to a tax of 25-26% on the increase in value of the property,aportioned to the amount used for the business. I.e. if half of the house is for private use only,and is your main residence, only the increase on the other half is taxable. Having knowledge of a few people and have sold and not been liable for this tax ,the interpretation seems a bit hit and miss. Best to find a Notaire who see's it to your benefit and get him to deal with the sale. It seems you took the trouble to register etc,as we did and then you find out the bad point of trying to play it straight.

Regards.

[Panda]

Slightly different angle but when I sold a house plus gite I had to pay CGT on the gite (we couldn't claim both houses as our primary residence, difficult to live in two houses), it was either this or pay the commercial tax, so it was 27% on the gain for CGT or 25% for commercial tax.  As the gite business was not registered as a professional business , just a side line (siret but no cotisations) we had to go for CGT, the notaire was great though and we ended up paying very little by a creative before and after valuation for the house that was the gite. 

Chose your notaire carefully there really are some out there that will help you pay as little as possible, get a recommendation if you can.  I believe like Gastines in B&B cases, that some have not paid this tax but our notaire felt it was always best to pay something, but make it as little as possible, that way you will not find yourself investigated further down the line should the transaction ever get reviewed.

Panda

[Rob101]

Thank you Gastines & Panda for your help.

I think it will be a visit to the Notaires next week, hopefully they will be able to shed a bit more light on the issue.

I do feel that it would be unfair if we were forced to pay yet more fees out as we are not selling to try and make money just because we want to sell. You are right Gastines when you say that sometimes you are penalised more for trying to do things by the book. (ie registering and paying cotisations for the business).

 

[ebaynut]

If you have only owned this property for nineteen months, and with house prices in the UK and France both going in one direction at present, if after deducting all the costs of buying, (immo fees, notaries fees, taxes etc, which are all far more in France then the UK and is "dead" money) plus any improvements that you have siret invoices for, you are left with a figure that needs to pay capital gains. I think that would be a good result.

CGT is only payable on capital 'GAINS'. [:)]