CGT on former French home

After living in France for 16 years, we sold and returned to the UK in 2015. We were French residents for 16 years. Our notaire says we will have to pay capital gains tax. Is he right? L.T.

There is normally a year or more of flexibility to retain the main home exemption under certain conditions, however the tax authorities consider that if you have established your residence in another country, you can no longer benefit from this.

Having said which there is an exemption under Code Général des Impôts article 150 U.II.2. as follows:

• You must be an EEA citizen (or another state if it has signed a relevant tax agree- ment with France) and have been a French tax resident for at least two years on leaving.
• You must sell the property in five years or otherwise show that you have had free use of it since the start of the year before the one when it is sold (ie. that it was your home in France, not rented out).

The exemption is limited to €150,000 of net taxable gain and you can only benefit from this for one property.

Reader's query answered by Hugh MacDonald

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