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Abatements on money from ISAs

Reader's query about abatements on money from ISAs.

1 October 2016

In 2014 I cashed in an ISA. The tax office has obtained details of the transaction and has requested more information including the value of the ISA when it was purchased and the date. They have indicated that the increase in value from the purchase date is subject to a tax of 60% or more, depending on the duration. Having considered the ISA a tax free form of savings, I am not pleased. K.B

The ISA is a UK investment and France does not recognise tax concessions another country may have just as the UK would not recognise the tax-free status of the Livret A or LDD. However, you may have misunderstood the tax calculation. There is an abatement of 50% of the gain if the holding had been held between two and eight years, and 65% if it has been held for more than eight years.

The net gain, after the abatement, is then added to your income and taxed accordingly, and made liable to the social charges.

It is the wrapper of the ISA that the French do not recognise, so it is not the contract that is liable to tax but each of the individual holdings within it.

Reader's query answered by Hugh MacDonald

If you have a money query send it to news@connexionfrance.com We select questions for answer every edition

  • The information here is of a general nature. You should not act or refrain from acting on it without taking professional advice on the specific facts of your case.
  • No liability is accepted in respect of this article. It is intended only as a general guide. Nothing herein constitutes actual financial advice.
  • The Connexion welcomes queries and publishes a selection with answers every edition. However, please note that we cannot enter into correspondence on money topics. Queries may be edited for length and style. Due to the sensitive nature of topics we do not publish full names or addresses on these pages.
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