When selling a property, does the Notaire go into all my residency/tax issues?

[Treetops]

I spend exactly half my time in France and the rest in the UK, where all my business/income takes place. However, I am now thinking of selling my French property, to go back to the UK, and I don't know which to claim as my principal residence. To avoid CGT, I could call the French property the principal residence, but all my tax is paid in the UK. If I do this will I be expected to be paying income tax in France? ie. Will the Notaire open a can of worms?? I can show proof of travelling etc. and I'll be seeing an accountant soon. However, I was wondering if anyone has any advice.

[Miki]

This was discussed at length a little while ago.

According to the main regulations,  residency in France for GGT (or rather non application of CGT) is in general, a person having made a tax return in France. The rules relating to CGT changed at the beginning of this year, which on the whole reduced CGT for maison secondaires but I think you will find that not having made a declaration or paid tax in France, your property will be declared a maison secondaire.

Still any CGT needing to be paid, will mean you have made a profit so..............

 

[BJSLIV]

It will all depend on the balance of your circumstances / income.

Given that you haven't already made yourself known to the Fisc you are starting at a disadvantage.

 But the real issue is whether it is now worth trailing all your UK income through the French tax system, and  calculating the cost thereof in terms of tax/ contributions, (& penalties for late declaration?), and professional fees, in order to save (I assume) 40% of whatever your gain is.

 

[Miki]

It will all depend on the balance of your circumstances / income.

What does that actually mean ?

I do not think that declaring a return now, for the sake of the saving of CGT is an option. For non residents who are fiscally "resident in France", you have to have declared a return to the HDI for at least 2 years previous, so that option is not available.

As far as trying to declare a return now, the Impots would simply not be privy to such an action. The rules are quite clear and declaring a return in the past is one of the top requirements. As is stated, it would probably open up a can of worms, that may well make what you have done (non return) illegal in the French Impots eyes anyway.

CGT on Maison secondaires is now reduced to 16% and is nil after 15 years (previously 22 years), after all expenses are deducted and payable at the time of sale and not on an annual tax return.

Between 0-15 years you will be given a fair amount of reductions against your CGT including charges on buying and all works carried out by artisans, of which you can show the Facture. 

 

 

 

[BJSLIV]

Miki

circumstances / income?

Sorry meant

circumstances & income.

If we are being picky presumably you meant party not privy

I think they are already privy to a lot more than we might think, but as to what retrospection they might get involved in, thats where the circumstances to come into it.

If our friend has juicy worldwide income which might  profit the Fisc, they might be very interested, probably to his detriment.

I suppose the nightmare scenario would be if he were to prove that he should have been declaring worldwide income for a number of years, hence landing himself with back tax and penalties, but then they still disallowed the CGT claim, on the technicality of the number of returns.

I agree with your original comment, if there is CGT to pay on a gain, even at 40% its probably a small price to pay to keep out of the clutches of the Fisc.

However again if there is loads of money in play there are probably (expensive) advisors about who may be able to justify their costs. But that would require detailed probing of the circumstances and income on both sides of the Channel.

[Treetops]

Thanks all. The first reply answered my querie very well. Cheers!