Demand for back tax for house sale in 2003

[mlt1976]

Hi everybody,

This seems a long way from my previous posts when I was an excited new house owner in France four years ago! We bought and sold a property within 12 months when we moved to France in 2002. We made a reasonable profit by making the house far more attractive (without spending a lot of money) and moved nearer the coast. For personal reasons we moved back to England shortly after (losing a small amount of money on are second sale). The notaire was happy to accept that the original house was our family home (our son went to school in the local town and we filled in an income tax return)) and did not deduct capital gains tax. The French authorities are now demanding a large sum of money on the basis that we made money on the house in a short period and are classing this as income. Despite my protestations they are insisting I pay the money.I was warned by the notaire that my case could be reviewed any time within 5 years

Is there any thing I can do - is it worth trying to find a tax advisor or should I just extend my mortgage and pay the money? It seems to me that they can make the facts fit however they want!

I know I should not say it but what if I just refuse to pay - is there a reciprocal tax agreement with the UK?

Thanks for any help you can give me.

[BJSLIV]

Your problem is that the French take a dim view of making money out of property. Even though it was your main residence, you will need to  convince them that you had good reason to move within five years of buying your property. Divorce, job transfer, death of partner are all acceptable reasons.

You need help from someone who can convince them that your flitting about France was for a good reason and not simply a money making stunt.

I assume that they are attacking you for the full 16% plus social charges, so there is enough money at stake to make it worthwhile paying for good advice. Potentially a cople of grand well spent.

PS I sometimes amuse myself imagining  the Fisc getting their teeth into all the amateur property developers hoping to make a packet, egged on by all the Channel 4 & 5 programmes "Make a Mint Out of Property Abroad".......

[Nick Trollope]

BJ is right. You will need to prove that you are not property developers. And yes, they will persue you via the Inland Revenue (or whatever they call themselves nowadays - Her Majestys Revenue & Customs or Excise or Winscale...).

Get some advice!