FRENCH CAPITAL GAINS LAW

[gerald]

Bonjour!

Are there any "Legal Eagles" out  there who could resolve the following - s'il vious plais!:- 

1.  French property is owned 50-50 by two people (one has a French mortgage).  2. Only one of the parties will register as resident and will be in effect, their "Maison Principal". The other is here 6 months at a time. 3.  French Capital Gains Tax rules, depict that any property owned in France MUST be "Maison Principal",  and if sold, (at any time) will be precluded from CGT of 26%.  If not, and if sold, in the first 5 years, it will attract 26% CGT (thereafter, reducing in the intervening years).  Our problem is that only one party will be precluded from the CGT!

Please can anyone answer: a) How long after registration are they precluded from CGT in the event of a sale and B) What penalty is imposed on the "non-reisdent" party.  She does NOT wish to register, for UK Tax purposes.

Many thanks in advance.

 

[Panda]

Hello

Not quite sure what yu are asking but, CGT for non french residents is 16% not 26%, so the non resident person will simply pay 16% of any profit at the point of sale, the maison principal resident will not, quite simple really.  If they sell after 15 years neither party will pay any CGT.

I have personal experience of selling a house with some parties being resident maison principal some not, the notaire just charges the correct tax sum to the correct party.

Panda

[Sunday Driver]

You will find the answers on [url=http://www.notaires.fr]www.notaires.fr[/url]

a) There is no requirement on length of residency.  In order to qualify for exemption from CGT, the building must serve as the seller's principal residence on the day of the transfer.

b) The non-resident party will be subject to CGT in their proportion of the gain.