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Should I declare capital gain in France from selling overseas home?

A key defining issue for this is whether the country involved has a double tax treaty with France 

The French tax authorities consider that some treaties make the gain also liable for taxation in France Pic: Novikov Aleksey / Shutterstock

Reader question: I am tax resident in France and have a property outside Europe which I plan to sell. Am I required to notify the French tax authorities when I receive the payment for this sale and, if so, how?  A.H.

The answer to this depends on which non-EU country you are referring to.

The defining issue is then most probably whether that country has a double tax treaty with France or not.

If it does, then most of the French double tax treaties with other countries say, firstly, that the country in which the property is situated has the right to tax the gain. 

The French tax authorities, however, consider that some treaties (not all) make the gain also liable for taxation in France. 

If there is no liability in France, then there is no need to declare anything to France. However in cases where, due to the treaty wording, the gain is not exempt from French taxation, a declaration has to be made to France but you will have the right to a tax credit against the French tax.

Depen­ding on the treaty, the credit in this case is equivalent to the amount of the French tax calculated on the gain or the amount of the foreign tax. 

Where there is no treaty at all, France will also seek to tax the gain (as well as the country where the property is situated) but we have usually found that it will provide a credit equal to the foreign tax if you provide evidence of having paid this.

Where the French require the gain to be assessed in France, you should declare it using form 2048-IMM-SD. 

Double tax treaties can be found at the tax office’s website, though these tend to be technical. We suggest taking professional advice and/or asking your tax office for guidance. You could do the latter, for example, by a message via your personal online space at the tax website.

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