Buying a house in UK, but still living in France

[David]

As we get older we are thinking of gradually moving back to UK.  We are French tax payers, and live in France, but we are thinking of buying a small house in UK to live in for up to six months a year, while still keeping our main house in France.

Eventually when we are ready we will sell our French house, and revert to UK tax.

While we have both houses, probably for two or three years, it is important to maintain French residency and French tax status so that our French house is our main residence, thus avoiding capital gains tax when we come to sell it.

We would be very grateful for any advice as to tax liability in both countries while we have both houses, and live about six months in each.  All income comes from UK in the form of old age pension, and savings.  Presently all income is paid into our French bank.

Many thanks in anticipation,

David

[idun]

We did just that, bought in the UK before moving back. However, we remained proper french residents until our move....... and our son lived in the house we bought in the UK.

Several things come to mind about this. As you mention income tax, then I would suggest that you call HMRC and ask to speak to a technician and explain what you want to do and ask how many days you could be in the UK without paying UK tax again. I imagine that all your income in currently taxed in France?

If you are suddenly classed as UK residents, what would happen about your E121 (S1's)? Without being in the CPAM, many mutualists will not cover, some things are all linked up in France.

Then there could be the house insurance problem. I had the devil's own job getting building insurance for long absences, and there was no way I would not be insured properly, this occured when our son moved out for several months. At that time we were insured via the AA who immediately cancelled our policy.........(I'd never use them again, they were so rude and awful about it and charged us a cancellation fee as long as keeping the money for the rest of the year, even though they cancelled...... sure that their terms and conditions said that they could, legal it may have been, but I simply felt robbed blind and still do). We had basic contents that were of little importance to us, so that was not a problem. We ended up with a company in Bristol, I think, but we had to guarantee that the house had someone checking it regularly, and either the heating on during winter, or the system fully drained. Then we ended up with Gallagher Lambert, I think it was, who were OK.

For us, it was great to know where we were moving back to. Just some things were rather more complicated that I had imagined that they would have been.

 

[EuroTrash]

"If you are suddenly classed as UK residents, what would happen about your E121 (S1's)? Without being in the CPAM, many mutualists will not cover, some things are all linked up in France."

But that wouldn't be a problem, would it - if you were classed as UK residents you would be back in the NHS, you'd have no more need of a mutuelle because you would get an EHIC and any medical costs in France would be reimbursed via that.

HMRC tend not to be helpful when you ask them what to do. In my experience they won't advise upfront - all they will do is assess your tax status on the basis of what you have done, after the event. However, the new rules on residency that are due to come in during 2013 unless they are delayed, can be found via google and are easy enough to understand so you can work out how to be or not be classed as UK domiciled. Tax residency and domicile are 2 different things but they are doing away with the added complication of 'ordinary residence'.

[David]

Thanks for that Idun and Euro Trash.  Much helpful information.

We had not even considered the problem of house insurance, as it is so easy to get maison secondaire insurance in France.  The house would be empty for 6 months of the year, and we had thought to class it as a holiday home.  We had assumed that, as there are so many holiday homes in the UK, insurance would be easy.

We do pay all our tax in France, and that would continue until we are ready to move back to UK full time.

Many thanks for your help, we will have to have another think.

David

[Cendrillon]

David, take a look on the laymyhat forum as there have been some recent comments about insuring holiday homes in U.K.

[idun]

I literally spent days phoning around to get insurance cover for our circumstances. And that was using the internet as a base. An empty house most of the time as we were in France........with holidays spent there.

And  if the E121 stopped and the EHIC kicked in, wouldn't it be prudent to have UK travel insurance. Problem is that that doesn't always cover such a long time in another country, does it? When I have looked into it, we have been told that they cover for so many days at a time, and sometimes only so many days per year. Or maybe the OP is well off enough to pick up any extra bills that they could incur if they ended up ill in France. We would need insurance, is all I can say.

 

[David]

Thank you everyone for your helpful replies.  Sorry for such a delay, but I have not been too well.

After your cautions about insurance, and looking on the laymyhat forum, it is certainly difficult to get insurance for a house left empty and unattended for up to six months a year.  We had not thought of this, only the tax resident problem.

Since your warnings, we have thought about the practical problems of leaving a house empty in UK, brochures left in the letter box, people seeing the house unused, etc., and are now rethinking our plans.  The house we had in mind was quite prominent and it would be obvious that the house was empty.

We have now shelved the project for further consideration, and we must thank you for your warnings.

It can be a funny old life, we posted as we were worried about one thing, and then another quite different matter, which we had not thought of, scuppers the project.  That can be the value of this forum, and we are grateful for your warnings.

David

[idun]

I didn't bother with contents insurance for our empty property, even though there were contents in it, nothing of that greater value that I couldn't replace easily. The buildings insurance however, was necessary as we have a mortgage and would have covered anything important.

Sometimes things are not as one expected. I know that my SIL swore to me that her parents holiday home in the lake district had proper cover, just like their usual english residence, but frankly I found nothing like that at all. I do get a little fed up of people telling me that insurance policies cover XYandZ and yet they do not.

And those who say that they spend six months in both countries, and are UK residents, then I wonder if their insurance companies know about this and would actually cover if anything happened. I know friends who were away for several weeks were not covered for anything when their house flooded. Burst tank, not flooding from outside.

[Gardengirl]

David, were you thinking of it as 6 solid months of the year in each country, or several splits? We spend 6 months in each country, but in smaller blocks - maybe 5/6/7 weeks at a time. Insurance is no problem, as we aren't away from England for more than 60 days at a time; in France the insurance is for a maison secondaire, so is expected to be left empty for periods. Our insurance company in England is Saga; the insurance policy allows us to leave the house empty for up to 60 days, and the same applies to our contents insurance.

When we did our Australia & New Zealand trip we went for 2 months; at that time they were fine for our son to pop in and check on doors/windows etc regularly, counting as not leaving the house empty, although I wouldn't want to have that arrangement for longer than our allowed period more often. We always have mail redirected to our son's house, leaving only business bumph which businesses drop at houses, which either our son passes by to deal with or our kind neighbours take it away. We do similar things when our neighbours are away, as at the present time. So maybe insurance won't scupper your plan, depending on the type of split you were considering. Good luck!

[David]

We are French residents subject to French tax, and were thinking of buying a maison secondaire in UK, to spend the winters in UK and the summers in France.  For the moment we want to maintain our French tax residency, and only visit the UK.

We would plan to spend some four or five months in UK over the winter, and the rest of the year in France.

Thus when we are in France, for perhaps seven months continuously, the UK house would be unattended and have no inspections.

I think that we have to think again.

Many thanks for your valuable advices.

David

[idun]

LOL how we are all different...... if we ever have the means to  have a pied a terre in France, we'd spend the winter in France and summer's in England. That would suit me just fine![:D]

[Gardengirl]

That's just what we do, Idun - most of the winter in France and most of the summer in England.

[idun]

It makes perfect sense to me...... but I doubt everyone will get it.[:D]

[David]

We originally planned to spend the winter in France, but have you tried a winter in Port Leucate in a house with only electric panel heating? 

Very, very cold and impossible (for us) to go out when the Tramontane blows, which is the majority of the time.  Not an enjoyable experience!

[Gardengirl]

We get the Mistral, which can be very nasty and so cold. But with that we get blue skies and sunshine, which is what we bought the apartment for; in the Thames Valley we hate the damp cold and grey skies (although it's a beautiful day here today - only 1C, but a clear blue sky and lovely sunshine).

There were only 3 small heaters installed in the apartment, but we removed one, as it was placed behind the kitchen door - a really odd place for a heater. Last summer we installed reversible aircon, which was lovely for cooling down the bedroom before going to bed (it was around 25+ in the bedroom before we fitted aircon, despite keeping the window and shutter closed all day), but has been great at warming the whole apartment while there in winter. Neighbours have the same aircon fitted, and love the fact that their electricity bills have fallen.

[mint]

[quote user="idun"]LOL how we are all different...... if we ever have the means to  have a pied a terre in France, we'd spend the winter in France and summer's in England. That would suit me just fine![:D]
[/quote]

Yes, that would be the ideal for me also.  Only thing is, all travel nowadays seems to be filled with hassle and uncertainty....or at least that's how it strikes me so old age or whatever must be catching up with me because I liked nothing more than jumping into cars, trains, boats, planes, you-name-it.

[Sprogster]

It is perfectly possible to get home insurance for a second home in the UK, as there are hundreds of thousands of second home owners in the South West and foreigners with a second, third or fourth home in London.

Most standard packaged home insurance policies will have the restrictions mentioned, but if you go to an insurance broker they will be able to obtain a customised quote from underwriters that meet your needs.

However, I would recommend that you install a monitored alarm system and pay someone to visit the property periodically to check the house, flush loos to stop the seals drying out and put the mail away, as this will keep the premium down.

[idun]

Sprogster, that was not what I found, not for a long term empty property. I called lots of brokers as well as insurance companies, I rang everywhere  I could think of and ended up with a company in SW England, Bristol perhaps. I got there in the end, but it was not easy. And it took me hours and hours.

As I think I said earlier, my SIL reckoned that her parents second home in the Lake District had insurance via their bank, but I even rang their bank and they said that they didn't do it. So there you go. They may have had an old policy that the bank had let run, but they were certainly not open to new customers. Or the bank didn't realise that the place was usually empty. I wouldn't care to say.

[Sprogster]

idun, do you think the thousands of people who have second homes in the UK all have them uninsured!

As long as the house is checked on and not left more than six months there is no problem with the buildings insurance, it is just the contents that can be a bit tricky especially if you leave valuables.

I deal with this issue frequently as it is in my line of business..

Google and you shall find, as it just took me a few minutes to find second home insurance without a restriction on the period the property can be left unoccupied.

[idun]

I even had problems when we bought this house we currently live in, as we were going to do it up before moving. I ended up with Gallagher Heath, but it was not easy.

And yes, I googled in 2007 when the UK house was to be empty whilst we were still in France and it was hard.  I had had to find a company to insure us as the AA cancelled our policy, as they do not have any companies that insure empty homes and  as we had a mortgage and had to have buildings insurance. I even rang the Association of British Insurers.  I didn't just ring one insurance company or broker I rang and rang and rang all over the country. Maybe at the time it was because we were french residents, I have no idea. I just know that I only found one company at the time that was interested in insuring us.

I agree that it should have been easy, but easy it was not, not at all.