Howie Posted October 28, 2009 Share Posted October 28, 2009 Hi all.I'm sure that SOMEONE has some knowledge of this!We are selling our house in the UK and moving to our house in France. It will therefore become our only home and we will apply for French residency in order to avoid any future CGT when we eventually sell it. But, just to complicate things, we intend to build another house on part of the land, split the property in two (one house in each plot), then sell the original house (with it's now, smaller garden), and move into the new house.So, can anyone give me a hint about any possible CGT implications? I would be really grateful.Thank you. Link to comment Share on other sites More sharing options...
parsnips Posted October 28, 2009 Share Posted October 28, 2009 [quote user="Howie"]Hi all.I'm sure that SOMEONE has some knowledge of this!We are selling our house in the UK and moving to our house in France. It will therefore become our only home and we will apply for French residency in order to avoid any future CGT when we eventually sell it. But, just to complicate things, we intend to build another house on part of the land, split the property in two (one house in each plot), then sell the original house (with it's now, smaller garden), and move into the new house.So, can anyone give me a hint about any possible CGT implications? I would be really grateful.Thank you.[/quote]Hi, Provided that while living in the first house, you submit at least one french income tax declaration, then it will be recognised by the notaire when you sell it as your principal residence, and so will be exempt from CGT. Link to comment Share on other sites More sharing options...
Howie Posted October 28, 2009 Author Share Posted October 28, 2009 [quote user="parsnips"]Hi, Provided that while living in the first house, you submit at least one french income tax declaration, then it will be recognised by the notaire when you sell it as your principal residence, and so will be exempt from CGT. [/quote]Thanks for the reply. And if we've split the property, turned it into two properties, sell one, and then (eventually) sell the other? Link to comment Share on other sites More sharing options...
Sunday Driver Posted October 28, 2009 Share Posted October 28, 2009 Provided that having moved into the second house, and you submit at least one further french income tax declaration from that address, then it will be recognised by the notaire when you sell it as your principal residence, and so will be exempt from CGT. (Apologies to Parsnips for nicking his sentence...... [Www] ) Link to comment Share on other sites More sharing options...
Howie Posted October 28, 2009 Author Share Posted October 28, 2009 Ahh. I see (so far). Thanks.So, the only grey area then, is the logistics/legal/tax implications of how to split one property into two properties, owning both, building an extra house, selling one part and then selling another, WITHOUT incurring CGT on any of it?I can't quite get my head around how the following will be treated:A/ When the land is split, 'property one' will be devalued.B/ 'Property two' will then be a different property - which we will also own (ie - 2 properties owned at the same time).I think 'B' might cause us a possible GCT problem.or.... am I somehow making it far too complicated?Thanks for all your help..Howie. Link to comment Share on other sites More sharing options...
parsnips Posted October 28, 2009 Share Posted October 28, 2009 [quote user="Howie"]Ahh. I see (so far). Thanks.So, the only grey area then, is the logistics/legal/tax implications of how to split one property into two properties, owning both, building an extra house, selling one part and then selling another, WITHOUT incurring CGT on any of it?I can't quite get my head around how the following will be treated:A/ When the land is split, 'property one' will be devalued.B/ 'Property two' will then be a different property - which we will also own (ie - 2 properties owned at the same time).I think 'B' might cause us a possible GCT problem.or.... am I somehow making it far too complicated?Thanks for all your help..Howie.[/quote]Hi, I think you are overcomplicating. It doesn't matter how the value of house 1 varies so long as you establish it as your principal residence (see previous posts); The same applies to house 2. In neither case will there be any CGT calculation so the values don't matter. Link to comment Share on other sites More sharing options...
Howie Posted October 28, 2009 Author Share Posted October 28, 2009 [quote user="parsnips"]Hi, I think you are overcomplicating. It doesn't matter how the value of house 1 varies so long as you establish it as your principal residence (see previous posts); The same applies to house 2. In neither case will there be any CGT calculation so the values don't matter.[/quote]OK. Thank you again.I can't help feeling that there's a huge CGT loophole here then. Technically, I could:-1/ Buy a house in a large plot of land.2/ Apply for permission to build an extra 10 houses on the land.3/ Split the original property into 10 different plots.4/ Sell the first property with no CGT liability.5/ Build a new house on plot 2 and move into it (principal residence).6/ Sell it with no CGT liability.7/ Repeat 10 times!Is that correct? Link to comment Share on other sites More sharing options...
Sunday Driver Posted October 28, 2009 Share Posted October 28, 2009 No. The impots have already thought of that wheeze.......If you do it repeatedly, then they will classify you as a marchand de biens and tax you accordingly. Link to comment Share on other sites More sharing options...
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