CGT (stocks not property)

[chessfou]

There are loads of threads about CGT relating to property but I can

find nothing here (nor anywhere else so far) that helps with a

particular question.

Example:

stocks bought in, say 2000 & 2001 & 2002 & 2003 & 2004 & 2005

move to France, becoming tax resident in France in 2006

sale of above stocks in 2007.

How to calculate CGT for French taxation? Value at sale is simple but less what?:

(a) - original cost (maybe with some taper relief according to years held); or

(b) - value at time of initiating French tax residency? (which happens to be when they will lose their tax-free status - see below).

Since all my stocks are in UK tax-free wrappers (PEPs and ISAs), I need

to decide whether I should sell the lot (at least all those showing

gains) prior to the move and then buy them back afterwards or whether

such a move is not necessary.

Can anyone help, please?

[Later]

I'm no expert, but I don't think tax free PEP's and ISA's (or SIPPS for that matter) are recognised under French tax law.  I seem to recall reading somewhere that you would be better off selling the lot before moving to France.  But as with all these things it is best to take professional advice.  It wouldn't surprise me if the gains were treated as unearned income, which would also attract cotisations.

[chessfou]

[quote] But as with all these things it is best to take professional advice.[/quote]

Well, yes ... and no!

If it was always best to take "professional advice" then one would

never run one's own ISAs, PEPs, SIPPs or anything else and so would be

permanently in the clutches of the "wise" and their x% off the top and

would be automatically debarred from outperforming them.

Sometimes it may be necessary (or desirable)  to pay for a bit of

specific advice but in general it is clearly best to do the research

yourself - YOU are the one it matters to, not the advisor. That applies

in spades to any specific investments.

PEPs & ISAs are simply UK tax wrappers and, as such, have no

relevance whatsoever in France. That's why I wanted to find out how the

CGT aspect is viewed (it seems, as I mentioned somewhere else, that it

is

simply the total net gain, even though the original purchase may have

been years before French tax residency applies - some countries use the

arguably more logical value start date of the commencement of tax

residency). Therefore the "general" answer is to sell those shares

showing substantial gains (buying them back again if desired), prior to

French tax residency, so that the gains(at least up to the point of

adopting French tax residency)  really are sheltered within the

PEP/ISA. Equally, the "general" answer is to retain anything showing a

paper loss for potential future off-setting.

And, of course, as soon as you can be reasonably certain that you will

remain in France for at least 5 years (preferably 8), then you should

whack the best part of £100k (EUR 132,000) out of the PEPs/ISAs and

into a French PEA (or more than one - the limit is one per adult not

one per foyer fiscal).

[Gyn_Paul]

[quote user="chessfou"][quote] But as with all these things it is best to take professional advice.[/quote]

, of course, as soon as you can be reasonably certain that you will

remain in France for at least 5 years (preferably 8), then you should

whack the best part of £100k (EUR 132,000) out of the PEPs/ISAs and

into a French PEA (or more than one - the limit is one per adult not

one per foyer fiscal).

[/quote]

Hey that's a great idea !  Where do I get the £100k ?

p

[Judith]

"of course, as soon as you can be reasonably certain that you will remain in France for at least 5 years (preferably 8), then you should whack the best part of £100k (EUR 132,000) out of the PEPs/ISAs and into a French PEA (or more than one - the limit is one per adult not one per foyer fiscal)."

So, for those of us not totally conversant with French acronyms - what is a PEA? And what does it do?????

[Russethouse]

Are you allowed to hold ISA's PEPs etc if you are French resident rather than English ?

 

[Russethouse]

Found the answer to my own question, you can retain them but not add to them.

[chessfou]

PEA = Plan d'Epargne en Actions.

You can think of it as a French version of the PEP-ISA series in UK.

It legally shelters money from the taxman for those who are French resident.

Russethouse's mono-dialogue(or dia-monologue) is correct (former UK

residents can hold PEPs/ISAs but not add to them - can be useful if you

just might return to Blighty and, apparently, a very

substantial percentage does. Especially useful since the UK version

limits the annual contribution to these things while the French version

is a total limit which you can put in all in one go, if you wish) but

could have gone further - they are generally (and so far I know of no

exceptions) not recognized as tax wrappers by the country of residency

and so will be treated as though the contents were in ordinary, taxable

savings/trading accounts (according to whether cash/dividends or

capital gain)..

[Judith]

Thanks - I'd read about Plan d'epargne but only for saving for a house which is not relevant in my situation - but a French tax-free saving scheme is likely to be highly relevant when I finally do get to France permanently when I retire.

What I'd really like to do is open a French saving scheme now (before I am tax resident - such as with ING France) but I don't know if this is possible until I become French resident. (I realise it may not be tax free). Do you know if this a possibility?

[chessfou]

[quote user="Judith"] What I'd really like to do is open a French

saving scheme now (before I am tax resident - such as with ING France)

but I don't know if this is possible until I become French resident. (I

realise it may not be tax free). Do you know if this a

possibility?[/quote]

Not a tax-free one and not some others (I suspect).

PEA - must be French tax resident

ING accounts - since you can't (legally) keep a UK ING a/c when you

leave the UK, I'm fairly sure you can't have a French one until you're

resident there.

You may well be able to open an ordinary savings a/c though (the UK

limitation, also EGG, seems to apply purely to Internet a/cs). You

could

try asking one (or more) of the major savings institutions - Caisse

d'Epargne seem to be at the forefront.

[Judith]

I had hoped to be able to operate it from the UK, but that looks increasingly difficult to achieve. Will just have to investigate more when I'm there on hols, but never much time then of course - however, your info has given me pointers to the research - which is what ths forum is all about - so many thanks.

[chessfou]

There should be no problem about operating any of them from here. However, opening is another matter.

As far as I know, the only accounts you can readily open from the UK

are with CABritline (a division of Credit Agricole). They tend to be

rather more expensive than any of the "French" banks (including Credit

Agricole) but they have the advantage (for some) that they are fully

English-speaking and the potentially huge advantage that you can open

accounts from the UK.