Reader question: I have had a French second home since 2001, bought by my UK limited company. All directors and shareholders are family members. I am now in my 80s and unable to use it. We need to sell. It has never been let. Do you have any advice?
It is unusual to own a French property through a UK company. To sell, it is likely you will need to prove the company is validly registered in the UK so the notaire will require the company’s Certificate of Incorporation and Memorandum & Articles.
In addition, they will need to see a directors’ board resolution confirming authority for the sale. If the company’s constitution includes a requirement for shareholder approval for the sale, then that would also be necessary.
These documents will need to be translated into French. The notaire might also need them to be legalised by having them stamped with the apostille. A notary public or some UK solicitors can organise this.The notaire might also need a legal opinion from a solicitor or English notary public confirming the company is able to sell. Again, that would have to be in French, and a translation legalised if not originally in French.
The directors should check the position in relation to capital gains tax (CGT). Calculation of CGT on the sale of a property in France by a trading company is done on a different basis from a sale by an individual, and might be higher than expected.
There might be another sting in the tail: a French asset owned by a non-French company may require submission of an undertaking to supply information about the beneficial ownership, at risk of a 3% annual tax charge. If the undertaking was not supplied previously, the tax office could look to impose that tax for the current and previous years.
Expert cross-border legal and accountancy advice should be sought to ensure the sale proceeds smoothly and tax implications are understood in advance.
This reader question was answered by Matthew Cameron of Ashtons Legal