Tax increase for French homes

As confirmed by the French Directorate General of Public Finances (Direction Générale des Finances Publiques DGFIP) tinyurl.com/y68fp8o2 UK residents are now:

• subject to French social security contributions at the full rate of 17.2% (previously 7.5%); and
• required to appoint a French tax representative to guarantee their payment of the tax.

This was reported briefly in Taxation (21 January 2021 page 4) and it presents an opportunity for a recap on the French capital gains tax system generally.

French system of taxing capital gains

The capital gains of individuals or tax transparent entities defined by article 8 of the Code Général des Impôts (CGI) – for example Sociétés Civiles Immobilières or SCIs – are subject to French income tax on the sale of immoveable property or an interest in such entities (SCI shares for example) (see CGI Art 150U to 150UD).

There are exemptions for the individual’s main residence...