Reader question: We are selling our second home in France, bought 23 years ago. Will we have to pay capital gains tax to the French government and duty on items we want to take back to England?
While the UK was an EU member-state, the capital gains rate was 19% tax plus a 7.5% social charges levy for EU residents. Non-EU residents usually pay the full social levy of 17.2%, so the bill increased from 26.5% to 36.2% post-Brexit.
Recently, however, the French reversed their decision over how to treat gains of UK residents, to align them again with EU residents.
In addition, capital gains tax reduces, after five years of ownership, to nothing for people like you who have owned their property for 22 years or more. From five years of ownership, social charges also decrease, reaching zero after 30 years.
If your property is worth more than €150,000, you must appoint a French tax representative. They usually charge 0.5-1% of the sale price.
Regarding duty, if you are moving permanently you will benefit from ‘Transfer of Residence Relief’. However, when moving goods from a second home to your main UK residence, you may have to pay VAT (normally at 20%, although some items are exempt).
Customs duties at variable rates depending on the item (some zero) will also be applied to the total value of the goods if you exceed your ‘personal allowance’ of £390 per person.
It may be possible to claim ‘Returned Goods Relief’ on VAT and duties for goods exported from the UK and then re-imported within three years. Duty is not payable if you can prove items were made in the UK or EU.
To understand more about French income tax declarations download our helpguide, Income Tax in France 2022 (for 2021 income). As a digital, downloadable guide, priced €14.90, it was last updated on April 8. Order your copy here