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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15977
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am a French National with France as my main residence. I

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I am a French National with France as my main residence. I have a second home in the UK which I bought 17 years ago. It has been solely for my own use, never rented, and I now wish to sell it. Do I pay capital Gains Tax in the Uk or in France?

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Gains made by non-UK residents on UK residential property became taxable in the UK from 6 April 2015 as you can read here and here. There are three ways you can work out the gain but as you have owned your property for 17 years, the most beneficial way will almost certainly be to use the 5 April 2015 value of the property as your "cost" for CGT purposes instead of the original purchase price. The first £11,100 of gains made in the current tax year will be tax free. CGT on residential property gains is charged at 18%, 28% or a combination of the two rates depending on the level of your UK income in the tax year the gain is made.

I'm not an expert on French tax but I strongly suspect that the gain will be taxable in France and if it is, then you will get credit for any UK CGT paid against the tax you pay in France. Clearly, the gain will be worked out in a different way for French tax purposes compared to the way used for UK tax purposes. Any disposal must be reported to HMRC in the UK within 30 days of the sale.

I hope this helps but let me know if you have any further questions.

Customer: replied 1 year ago.
Thank you for your reply. One thing I don't understand however is your reference to me using the 5 April 2015 value as the ''cost''. As you are probably aware, London property values increased dramatically in recent years. When I bought the property in 1999 I paid (the original ''cost'') £185,000. The 2015 value and the current value provided by local Estate Agents suggests £750,000. This would mean no value increase since the changes brought in in 2015. Using the link to the UK gov. site for CG Tax I could not see how I could use the 2015 value as the ''cost price'' of the flat.
Using the Tax site, their calculation arrived at over £132,000 CGT to be paid , so not very beneficial to me! Am I missing something which would be to my benefit? I look forward to hearing from you.

I cannot see how you arrive at a CGT liability of £132,000. If you use the 5 April 2015 value as your "cost" instead of £185,000 and you sell the property now for £X, what is your gain? In my answer, I said that you have the option to "use the 5 April 2015 value of the property as your "cost" for CGT purposes instead of the original purchase price." I can only think you have used the original purchase price as your "cost".

If you use the 5 April 2015 value as your cost, you deduct that from the disposal proceeds to arrive at your gain. The first £11,100 of the gain will be tax free. Assuming you have no UK income, the first £32,000 of the net taxable gain if there is one will be charged to CGT at 18% and any balance will be charged to CGT at 28%. This is assuming a disposal in the current tax year, 2016/17.

Customer: replied 1 year ago.
You are absolutely right of course. When I used the HMRC calculator I didn't appreciate that I could choose the option to use the 2015 value of the property. It seemed too unlikely I might pay so much LESS tax! Thank you again for your help.


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