Readers’ forum: French property and a SARL

My clients have bought a French rental property through a société à responsabilité limitée (SARL) with a cash loan to the SARL which I understand is regarded as an opaque entity in the UK. I can find little information about the UK tax situation on distributions and either the sale of the SARL or the property.

I have the following questions. First can distributions be treated as loan repayments until fully repaid then they would be dividends as with a UK company? Second is the sale of the SARL treated as a share sale subject to capital gains tax? Third if the property is sold and the proceeds distributed is this an income distribution or can it be treated as a capital distribution on a winding up?

I look forward to feedback from Taxation readers.

Query 19 665 –...