property / capital gains tax

[Yvonne]

I know there have been threads about this before but I found them very confusing!

We bought an old hotel, renovated it into a main home and a cdh business. Please can anyone advise what tax, if any, we pay if we sell after 3 years? It may sway the decision!! also, what % of sale value is capital gains tax if applicable?

Thanks

Abi 

[BJSLIV]

Should be fun.

If the house has been converted into a proper family residence, and its your residence, and you are in the French system you may have no CGT to pay.

However if its still has commercial overtones , and is really a hotel in disguise things might get more complicated, especially if you have been operating under a formal business structure, rather than an informal B&B.

Edit . Having looked at your website it looks as though it tends to the  commercial end of the spectrum. I expect that you would anticipate payment for the business rather than a simple property sale. I think you are going to need professional advice from your accountant.

 

[Yvonne]

Hi,

hhmmm that's what we thought.

One more question though, if we wait for the 'golden' 5 years are we then exempt of capital gains tax even as a business??

Thanks,

Abi

[Moorejw]

After 5 years your capital gain reduces by 10% per annum, so no real 'golden' opportunity there! The rules are a bit grey in this area, and usually if the 'business' is regarded as your main source of income then you pay CGT. If you have 5 or less letting bedrooms it should be regarded as your main residence and no CGT. I havve had clients with 4 letting rooms who escaped CGT.

Good luck!

Angie