UK capital gains and CGT

As well as understanding French capital gains tax (CGT), people moving to France should also be aware of how gains may be treated on assets held in the UK or elsewhere, and how double taxation is avoided.

CGT on the sale of a property in the UK

If, as a French resident, you sell property located in the UK, both countries may be involved in the taxation of the gain.

Because the property is situated in the UK, the UK generally has the primary right to tax the gain under the UK–France tax treaty.

The gain is typically calculated as the difference between the sale price and the acquisition cost, with adjustments for eligible expenses such as improvement works. UK rules determine whether the gain is taxable and what reliefs apply.

If the property was your main residence, you may benefit from UK private residence relief, which can significantly reduce or eliminate any CGT liability, depending on how long the property was occupied as your main home.

However, France will also require you to declare the gain if you are tax resident there. French CGT rules apply to worldwide gains, not just those arising in France.

If you sell a former main home shortly after moving to France (generally within one year, provided it has not been let out), France may still treat it as your principal residence and grant an exemption from French CGT.

Beyond this period, France may assess the gain under its standard rules, but a tax credit is usually granted for any UK CGT actually paid, preventing double taxation.

There are, however, specific scenarios where different reliefs may apply. For example, under certain conditions, a sale may be exempt from French CGT if the proceeds are used to acquire a main home in France.

Capital gains on shares and investments

If you sell shares or other investments while resident in France, gains are generally reportable in both countries.

In most cases, the UK–France tax treaty ensures that double taxation is avoided by granting a tax credit in one country for tax paid in the other. The precise treatment depends on the type of asset and the individual’s circumstances.

French residents must declare such gains on their French tax return, even where tax is ultimately due only in the UK or reduced through treaty mechanisms.

Sale of property in France

If you sell property located in France, France has the primary right to tax the gain.

UK residents (or former UK residents with ongoing tax obligations) may also need to consider UK reporting requirements, but double taxation is generally avoided through the tax treaty, with credit given for French tax paid.

French rules include exemptions for a principal residence and reductions in taxable gain based on length of ownership. For second homes and investment properties, CGT is usually payable in France, though reliefs may reduce the effective rate over time.