French CGT on UK property sale

[frexpt]

I know this is an old chestnut, but I can't see any recent definitive information.

Our situation is that we are considering selling two UK residential rental properties which we have owned for 17 and 14 years respectively.

Because of the Sterling / Euro exchange rate when we bought, one will show a Euro profit, whilst the other will show a Euro loss.

What I am unclear on is whether (as French tax resident) taper relief applies on disposal of UK property and, also, if so, how is that applied to the property showing the Euro loss?

I am not sure where to find the information.

[DraytonBoy]

Taper relief certainly does apply here but I don't think you can offset the loss against the profit. In addition you've got to notify HMRC of any sale regardless of whether you've made a profit or not, you could get fined if you don't.

[frexpt]

Thanks. I am aware of the 30 day rule in the UK, but there is unlikely to be a liability there as we can rebase the Sterling values at 2015 and there won't have been much of a gain since then.

It will be a pity if losses can't be used to offset gains ..... jolly unfair in fact!

[Catalpa]

We sold some land in the UK about 4 years ago. We advised tax office in France about the sum we received and the reason for it but we were told (and I can't remember or find the correct wording right now) that as the asset sold was 'fixed' in the UK - land, buildings, etc - any taxation would be levied by the UK tax authorities, not France. And that's what happened - the fact we were France-resident was irrelevant.

What impact Brexit may have on taxation relating to future sales is way beyond me.

[CeeJay]

If I may go slightly off topic, I have sold my UK apartment and awaiting a final date to exchange.

I bought the property in 2011 so I am presuming that the relevant CGT will only apply from 2015 when the criteria was changed.

How can I research what the property value was in 2015?

[frexpt]

[quote user="CeeJay"]If I may go slightly off topic, I have sold my UK apartment and awaiting a final date to exchange.

I bought the property in 2011 so I am presuming that the relevant CGT will only apply from 2015 when the criteria was changed.

How can I research what the property value was in 2015?[/quote]

Being non-resident, you can rebase the valuation at 05/04/2015. An RICS qualified valuer/surveyor can provide a formal valuation, or you can look at www.ourproperty.co.uk and hopefully find a similar sale in the locality around that date. I think HMRC will accept that.

Our properties are in Scotland, so a formal valuation has to be done before the property comes to market, so we just ask the valuing firm to provide a 2015 figure as well.

[DraytonBoy]

[quote user="Catalpa"]

We sold some land in the UK about 4 years ago. We advised tax office in France about the sum we received and the reason for it but we were told (and I can't remember or find the correct wording right now) that as the asset sold was 'fixed' in the UK - land, buildings, etc - any taxation would be levied by the UK tax authorities, not France. And that's what happened - the fact we were France-resident was irrelevant.

What impact Brexit may have on taxation relating to future sales is way beyond me.

[/quote]

As a French tax resident you have to account for your 'worldwide' income which would include the profit on the sale of any asset such as land or property, if that wasn't the case why do you have to declare here the income from UK rents?

[Catalpa]

[quote user="DraytonBoy"]

As a French tax resident you have to account for your 'worldwide' income which would include the profit on the sale of any asset such as land or property...[/quote]

I refer you to the point I made originally:

[quote]We advised tax office in France about the sum we received and the reason for it...[/quote]

We paid the relevant taxes for the specific category in the UK and France did not levy additional taxes. In fact, after advising the French tax office, they said (in writing) that it wasn't something for them (the 'fixed asset' thing) and our tax responsibility lay within the UK tax system.

[quote user="DraytonBoy"]...if that wasn't the case why do you have to declare here the income from UK rents?[/quote]

I don't know - and as I don't receive rental income from a UK property, it's of no interest to me.

The OP asked about sale of UK property and my response was specific from our experience of selling a 'fixed asset'. Of course, that doesn't make my experience particularly helpful for the OP's specific circumstances / original questions. [;-)]

[chessie]

D Boy - I believe the reason that UK rental income has to be declared in france is that it can put one into a higher tax bracket.

Even though NOT taxed directly here in France - the 'total' income can move you up the tax ladder.

At least that's how I understand it.  But I could be wrong......I'm not perfect.

Chessie