Vendeers Posted February 23, 2005 Share Posted February 23, 2005 HiOne for the legal beagles out there!We are maison secondaire owners but live and work in tied accommodation in the UK. We have no Principal Private Residence in England. Are we entitled to nominate our French home as our PPR for CGT purposes?My accountant in the UK has told me that the Inland Revenue would look for proof of residency such as the property being my official postal address where documents such as bank statements are sent to. Obviously, this test could not be applied in our case.My understanding is that everybody in the UK is entitled to one PPR where relief from CGT is allowed. Given the unusual nature of our situation - being in tied accommodation (ie the house we live in here in the UK is part of the job) - I am curious to know where we stand in French law.Any enlightenment would be hugely appreciated.Adam Link to comment Share on other sites More sharing options...
zeb Posted February 23, 2005 Share Posted February 23, 2005 My understanding is that in France, for your property to be your principle residence, you would have had to fill in annual tax return from that address. Link to comment Share on other sites More sharing options...
Vendeers Posted February 23, 2005 Author Share Posted February 23, 2005 Thanks for this.However, what about the joint agreement between the French and English tax offices? Isn't it enough that I pay taxes here in the UK? Should I not, therefore, be entitled to the same benefits and allowances in France as I would be in the UK due to this so called agreement?CheersAdam Link to comment Share on other sites More sharing options...
Babnik Posted February 23, 2005 Share Posted February 23, 2005 If you were allowed to nominate your prinicple residence, wouldn't all those people with large 4 million pound mansions buy themselves small flats for say £50,000 and nominate that as their principle residence? Maybe that's what they do and I don't know about it!!! Link to comment Share on other sites More sharing options...
BJSLIV Posted February 23, 2005 Share Posted February 23, 2005 wouldn't all those people with large 4 million pound mansions buy themselves small flats for say £50,000 and nominate that as their principle residence? Thats exactly what you can do, but the other way around, otherwise you would be paying CGT on £4m rather than on £50k.As far as the dual taxation treaty is concerned it says that you won't pay double tax , not that you won't pay any tax. So even if you could nominate the French property as main residence, because of the tied cottage position, it would still be a maison secondaire to the French because you hadn't been fiscally resident in France. So no tax paid in Uk to offset any French liability so you could be liable to some tax at 16% if you sold in less than 15 years. Link to comment Share on other sites More sharing options...
Vendeers Posted February 23, 2005 Author Share Posted February 23, 2005 Would I be liable for CGT if I sold up after 15 years? It seems to me that the French system is more favourable to someone in my position than the UK one where the CGT liability stays fixed at 40%. The diminishing liability situation in France makes it the more attractive proposition...Thanks for your contributions!Adam Link to comment Share on other sites More sharing options...
Judie Posted February 24, 2005 Share Posted February 24, 2005 UK CGT is NOT fixed at 40%.It is chargeable at your highest rate of tax, be that 10, 22 or 40%.Judie Link to comment Share on other sites More sharing options...
BJSLIV Posted February 24, 2005 Share Posted February 24, 2005 CGT is NOT fixed at 40%Gadzooks! Do you mean they are letting the impoverished into this forum Link to comment Share on other sites More sharing options...
Vendeers Posted February 24, 2005 Author Share Posted February 24, 2005 Oops, sorry.I just squeeze into that bracket: Link to comment Share on other sites More sharing options...
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