Liability qualifying period for CGT

[Ralph]

I have been studying previous Q & A's regarding qualifying periods for liability (more importantly non-liability!) of CGT, but am now more confused than ever! So apologies for all those who understand what is required, but I still need clarification!

We have owned a property in France since 2003 (retaining our UK property) but so far only used it as holiday home. From the beginning of next year we will have retired (under the statuary retirement age by some 2 years), and intend to reside permanently in France, renting out our UK property as a bit of extra income.

I have two main questions:

1. am I right in thinking that one needs to own the French property for 15 years to avoid French CGT,

2. if so does the period we have owned the the property but not lived in it (ie when it was a holiday home), count towards that 15 years?

 

Ralph Locke[8-)]

[Pickles]

[quote user="Ralph"]

We have owned a property in France since 2003 (retaining our UK property) but so far only used it as holiday home. From the beginning of next year we will have retired (under the statuary retirement age by some 2 years), and intend to reside permanently in France, renting out our UK property as a bit of extra income.

I have two main questions:

1. am I right in thinking that one needs to own the French property for 15 years to avoid French CGT,

[/quote]

In the general case, it depends, and in your case, then no. If it is/becomes where you live and base yourself (which is the situiation that will apply to you), then when you come to sell it there will be no liability to French CGT, no matter how long you have owned it, so long as you are living in it at the time of sale. The Fisc would take a dim view of someone who just moved into the property effectively in order to sell it (in the same way as would HMRC if you did the same thing in the UK). The 15 years simply applies to gains on any property that is not your main residence.

Regards

Pickles

[Jacqui Too]

Ralph

Whilst you are living in the UK your French property is your second Home and if you sell it  you will be liable for CGT on any profit made, The whole time you own it will count towards that 15 years when you will be free of French CGT but you would still be liable for UK CGT

If you move permanently to France and you submit your annual tax return there, your French property will become you main residence and you would not be liable for any CGT, but then your UK home becomes your second property and if you sold it you will be liable to pay CGT in the UK and possibly some CGT in France if you had not owned it for 15 years 

I hope that Helps

Chipie