Effect of donation-partage on CGT in France
Some time before a UK resident sells a holiday home in France they may have made a donation-partage to their children (a legal procedure, sharing property among one’s children in one’s lifetime; for example giving them a legal right to a house, while retaining lifetime use). In some scenarios this might later have been revoked. How does this affect French capital gains tax and social taxes when it is sold? W.O.
If the donation-partage is still in force, it is the children who own the property and they will be taxed on capital gain from the date the donation-partage was made until the date of the sale.
If the donation-partage is revoked, then the capital gain is from when the donation-partage was revoked until the date of the sale and would presumably be the liability of the parents.
Whether the owners are the children or the parents, abatements will be allowed, which are (for CGT), 0% for years one to five, 6% per annum for years six to 21, and 4% for the 22nd year, and for social charges 0% for years one to five, 1.65% per annum for years six to 21, 1.6% for the 22nd year and 9% per annum for years 22 to 30.
Reader's query answered by Hugh MacDonald
The Connexion welcomes queries and regularly publishes a selection with answers. However, please note that we cannot enter into individual 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 Due to the sensitive nature of topics we do not publish full names or addresses on these pages.
Send your financial query to firstname.lastname@example.org
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 these articles. These articles are intended only as a general guide. Nothing herein constitutes actual financial advice.