Capital Gains Tax - Or Not?

[Jon 1]

I believe that there may not be any CGT to pay in the following scenario,  should the French property be sold, but am I wrong?

Property in France bought as a second home, but has been sole property owned for more than a year.   UK resident, in rented accommodation, and tax paid in UK from Public Sector pension, and on savings.   French resident for about 5 months each year.  Documentary evidence can be provided for all the foregoing.

 

 

[Nick Trollope]

[quote user="Jon"]

I believe that there may not be any CGT to pay in the following scenario,  should the French property be sold, but am I wrong?

Property in France bought as a second home, but has been sole property owned for more than a year.   UK resident, in rented accommodation, and tax paid in UK from Public Sector pension, and on savings.   French resident for about 5 months each year.  Documentary evidence can be provided for all the foregoing.

 

 

[/quote]

I think you will pay CGT, as you are not tax resident and I doubt if you have filed a French tax return (for 2004). You will pay 16% on the capital gain (no SS charges, becuase you are not resident in France).

If you had a partner & owned 2 houses between you, you could claim that this was your primary residence, but I doubt if you would get away with it on your own...

[Will]

I would agree with Nick.

In principle, you need to be a French taxpayer in order to benefit from French tax concessions (e.g. relief from capital gains tax on property used as principal residence). But as he indicates, as a non-taxpayer in France you benefit in another way, through not being eligible for the additional 11% (on top of the standard 16% plus value rate) in CSG, CRDS, PS etc charges. Note that being a French taxpayer means that you will have filed tax returns from the residence you are selling, you don't necessarily have to have paid any tax. Local taxes, or paying tax on income from gite rental etc while resident elsewhere, do not count.

If this is important to you, best to ask an accountant, or to establish with the notaire who will be handling the sale (and who is the person responsible for calculating tax liability and collecting the tax) exactly what your liability will be. There are ways of avoiding tax, but it doesn't sound as if any apply to you.