Selling a business that's also your home

[Lachouette]

We'll be putting our B&B (our main home with rooms to let) on the market soon, and have it in mind that a few years ago we heard that it's best to sell as a home rather than a business. Does this ring any bells with anyone? We assumed we'd carry on with the business until it's sold but maybe not if it brings crippling CGT bills! If it makes any difference, we're registered as a business with the Chambre de Commerce.

Thanks in anticipation,

Jan

[Anton Redman]

I believe the issue is also TVA. When you sell a business you have to charge TVA at 19.6 %. I am not sure when and if the TVA is recoverable by the person who buys if the business as a business.

[connolls]

Hi Jan,

Sent you PM. Hope thats ok ?

Kind Regards Mel.

[Chrissie]

At our recent signing of a compromis d'achat, the Notaire asked the seller specifically to declare if any portion of his house had been let out or used for a business at any time during their occupancy.

Chrissie (81)

[crossy67]

How would you be able to charge TVA if you were not registered for it?

This one is quite interesting for me as we have a large house and were thinking of taking guests for a couple of months a year.  However, I doubt we would want to be doing this full time or on a permanent basis and would like to keep our options open if we wanted to sell the house in a few years.

Any more info would be greatly received.

Thanks.

[Will]

[quote user="crossy67"]How would you be able to charge TVA if you were not registered for it?

This one is quite interesting for me as we have a large house and were thinking of taking guests for a couple of months a year.  However, I doubt we would want to be doing this full time or on a permanent basis and would like to keep our options open if we wanted to sell the house in a few years.

Any more info would be greatly received.

Thanks.

[/quote]

Unlike in Britain, there is no 'registration' as such for TVA in France. If you have a micro-entreprise (which includes autoentrepreneur) you come outside the TVA regime. If your business is 'réel', even if the turnover is below the micro limit, you are liable for TVA.

If you have run a micro business from your home in France, then it is still a business and you should declare it as such to the notaire. The notaire and/or the local tax office will decide whether, or in what proportion, TVA may be payable. My understanding is that if you have run an unregistered B&B business (even though it may be 100% legal) then you should treat it as a private residence when selling.

[crossy67]

Thanks Will.

So declare to be legal or don't if we want to sell the house in a few years?  We were thinking of my wife going AE for this.

[Lachouette]

Thanks for everyone's opinion. Looks like a visit to a notaire and/or theHotel les Impots will be in order. I'll post back when I have some idea.

Jan