Taxing times

After the Brexit transition period, the amount of capital gains tax you pay on the sale of a French holiday home and the way you pay it may change, Matthew Cameron explains

- Matthew Cameron

The UK has entered the transition period of Brexit, due to end on 31 December 2020. It is not yet clear whether the UK’s departure will be preceded by a trade agreement, or whether the departure will be without a deal.

The result of those negotiations may have some bearing on procedures to be followed when a British national not resident in France comes to sell a French house. Here, we will look at how the tax implications of selling may be affected by the ongoing trade talks. People thinking about selling a property in France while remaining UK tax resident will want to give these issues some careful thought.

CURRENT SET-UP

When selling a home that is not your main residence, you will potentially be liable to pay capital gains tax. This is a tax on the difference between the sale price and the original purchase price or acquisition value and some other allowances: effectively the profit you make. The allowances available in France to reduce the taxable profit include the notaire’s fees and duties paid when you acquired the property, the cost of agency commission if you paid it, and the cost of works you’ve carried out to the property.