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TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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In 2014 we relocated to France through work

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In 2014 we relocated to France through work for approximately 3 years, after which we will return to the UK. Prior to moving our home in the UK was on the market. We intended to buy a plot of lank to build in the UK. Before we left the UK, we had people who wanted to buy our home but they weren't in a position to do so immediately and they subsequently rented it from us. Now 10 months on they are ready to purchase. However, we are now concerned that as French residents we will be liable to Capital gains tax in France and possibly also in the UK (with the added complication of having rented for a short period). Also the land purchase has fallen through. Can you provide any insight into this dilemma please?
Hi.Can you tell me how long you have owned the UK property please. Was it your main home for all that time up to the point that you moved to France?
Customer: replied 2 years ago.
We purchased the property as our home in Oct 2007. It was our main residence all the time until we moved to France on 12th Nov 2014. Yes the move was instigated by my employer. It is approximately a 3 year secondment

Leave this with me while I draft my answer. It will take a while so please bear with me.
Hi again.


You might refer to the notes in HS283 for information on the main residence and CGT.

You may be aware that non-UK resident owners of UK residential property who sell those properties after 5 April 2015 are potentially liable to CGT in the UK, whereas before 5 April 2015, they were not. As far as UK CGT is concerned you have several options to minimise your exposure to UK CGT as follows:

1 If you sell the property within 18 months of moving out, you will pay no UK CGT. The gain for the period that you occupy a property as your main home will be exempt from CGT as will the gain for the last 18 months of ownership regardless of the use to which the property is put, even letting. Letting will in fact help you if you keep the property for longer than 18 months after you move out as it will allow you to claim letting relief of up to £40,000 per part owner, the actual level being dependent on the facts and figures of the case. Example 9 in HS283 is worth a look to appreciate the effect it can have.

2 As you were sent to work in France by your employer, provided you do not buy a property in France and you re-occupy the property when you return to the UK before you sell it, you will qualify for main residence relief for the entire period of ownership of the property, even if it was let. Take a look at CG65030 to CG65050 starting here for more information on that. Click on "Next Page" at the bottom right of each page to move to the next one.

3 As you may sell the property whilst non-UK resident, you might choose to use the 5 April 2015 value of the property as your "cost" for CGT purposes (as opposed to the actual cost) if it is to your advantage. There are a number of variations to this claim whereby you can either ignore the pre 6 April 2015 period of ownership or not depending on how if impacts on the taxable gain, if there is one. Take a look here for more information on that.


I'm afraid that, since the current French government came to power, the rules around CGT in France and how it impacts on taxpayers with property in France or elsewhere has changed so often that I've lost trust in the information available on the internet as to how current it is. For that reason, you really ought to seek advice from a local accountant or tax consultant. I'd be surprised if there was no relief from French CGT to reflect the fact that the UK property has been your main home.

You might be able to get some advice through your employer if they are a large company with internal or external advisers who they use to manage and advise on their international tax obligations.

I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.
Thanks for the information about the UK tax aspect. However, it really was the French liability that I was most concerned about as it is both an unknown factor to me and potentially a much greater amount. This is what I was expecting information on and why I agreed to pay the significant fee for the information.
This is a UK tax site and we really only answer on the specifics of UK tax and advise customers to take advice from an expert on the specifics of foreign tax they may be liable for.

I explained why I wasn't happy with going into detail on French CGT given that its been a mess since the current government came to power in France and started to tax so heavily that many French nationals have emigrated.

I will do my best to find out what I can and will get back to you but I'm not a French speaker and, if I were you, I'd be seeking advice in France.

Hi again.

Article 6 of the UK/France double tax treaty here deals with capital gains and Article 24 deals with a situation where tax is due in both countries.

I've found some notes on French CGT which appear to be up to date apart from the fact that non-UK residents can be liable to UK CGT as I explained earlier, from 6 April 2015. However, any CGT you pay in France will be deductible from the UK CGT liability if there is one. The notes start here.

The basic rate of CGT in France is 19%. There is also a social charge of 15.5%. Whilst the French CGT charge is deductible from a CGT liability in the UK but the social charge isn't as HMRC and the European Court of Justice agree that it isn't tax. There is also a supplementary tax based on the size of the gain. There is some commentary on the social charge here. I suspect that only non-French tax residents will qualify for exemption from the charge or reimbursement if they have already paid it.

A tax resident of France will qualify for discounts from the gain arising from the disposal of a property outside France on the same basis as a property in France that is disposed of. There are discounts for the period of ownership of a main home as described here and the costs that you can claim in computing the gain are set out here.

Hi again.

As I said in my original answer, there is much of contradictory information on French CGT on the internet mainly because of the French government changing the rules almost on a monthly basis. It seemed like that at one point at least.

The link I gave you was a little vague on the French CGT situation for a property which has been your main home but has been let before you sell it or you move out before you sell it. It talked about a year after moving out to sell it and no allowance if it was let. What it didn't definitively say as you will read in the fourth paragraph here is that the loss of main residence relief applies to the whole gain, not just the period of ownership when you were not living there or it was let.

As I advised earlier, this is a UK tax advice site and whilst I do advise people who are moving abroad it is usually to deal with their UK tax situation for the year they leave, the period while they are abroad and the amount of time they can spend in the UK whilst working abroad in order to maintain non-UK resident status and when they return, not the tax situation in the country they move to. I can only give you pointers and, given the state of flux tax has been in in France, the best advice will be obtained from a French tax expert.

You don't have to pay for my answer if you don't feel it is worth what you have paid as a deposit. You can simply leave the answer unrated, ask for a refund and for the question to be closed. I'd prefer you to do that than rate my answer as poor since, frankly it isn't and this is a UK tax site not a French tax site. It's an honest view of the situation in France and, even as someone who has been working in tax for 36 years, I'd still seek advice from an expert on French tax given all that has gone on there in recent years around tax if I was thinking of moving there.

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