Capital Gains Tax on selling secondary home and buying another

[Barry Maund]

I want to sell my secondary home in The Alps and buy a property in Dordogne. Will I still have to pay capital  gains tax if I am re-investing all or part of the proceeds of the sale.

 

[gosub]

Probably. Buying another property with the proceeds of the sale, makes no diference to the tax man.

Look Here

[Danny]

It depends when you bought the second home. If more than 15 years ago, then the answer is no. If less than 16 years then the answer is yes.

Useful reading here:

http://www.french-property.com/guides/france/finance-taxation/taxation/capital-gains-tax/

Danny

EDIT crossed posts with Les

[Barry Maund]

Hi,

Thanks for reply , we bought our house 10 years ago.

I read the article you proposed - thanks

We have been paying "taxe d'habitation" for the 10 years. We live in the Alps for 6 months approx each year -  Could I reasonably claim primary residence - I haven't submitted any income tax assessments

 

 

[parsnips]

[quote user="Barry Maund"]

Hi,

Thanks for reply , we bought our house 10 years ago.

I read the article you proposed - thanks

We have been paying "taxe d'habitation" for the 10 years. We live in the Alps for 6 months approx each year -  Could I reasonably claim primary residence - I haven't submitted any income tax assessments

 

 

[/quote]

Hi,

      If you haven't declared for french tax you will be treated as non-resident, so it can't be your principal residence. On the other hand you will only pay CGT at 16% with no social charges ;

      Do you make a declaration in the UK?

[BJSLIV]

There will also be the normal 18%, less allowances, C G Tax liability back in the UK, assuming that is where you are fiscally resident.

[parsnips]

[quote user="BJSLIV"]There will also be the normal 18%, less allowances, C G Tax liability back in the UK, assuming that is where you are fiscally resident.[/quote]

Allowance given for any CGT paid in France.

[Pickles]

[quote user="Barry Maund"]I want to sell my secondary home in The Alps and buy a property in Dordogne. Will I still have to pay capital  gains tax if I am re-investing all or part of the proceeds of the sale.

[/quote]

Yes: the only possible exception (from the UK perspective) would be if it were a business asset and correctly structured (and it sounds like it isn't, from what you have said).

[quote user="Barry Maund"]we bought our house 10 years ago.[/quote]

So from the point of view of the French Fisc, you will benefit from 5 years worth of taper relief on the capital gain. However, if you are UK-resident and domiciled, then you are liable to 18% CGT in the UK, bearing in mind that you will get credit for the French CGT paid and have the benefit of your annual CGT allowance for yourself and partner (assuming it was bought with a partner).

[quote user="Barry Maund"]We have been paying "taxe d'habitation" for the 10 years. We live in

the Alps for 6 months approx each year -  Could I reasonably claim

primary residence - I haven't submitted any income tax assessments[/quote]

Everyone that has a second home pays TdH. The fact that they pay it does not make them resident in France. Assuming that you are UK resident, even if you managed to convince the Fisc that it is your primary residence (not likely), you would STILL have a UK CGT liability.

Regards

Pickles