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Readers’ forum: Should client’s tax return show disposal of Paris home?

02 May 2023
Issue: 4886 / Categories: Forum & Feedback , Inheritance Tax , International
French usufruct

A client (UK tax resident) who owns a residential property in Paris undertook a ‘usufruct’ in France ie transferring ownership to his daughter while retaining the use of the property and the rental income arising from the property until he dies. The property was valued at €300 000 and the usufruct was valued at €150 000 on the date of transfer.

Our client paid French inheritance tax on the usufruct value of €150 000.

Should our client’s tax return show a disposal of €300 000 or a part disposal of €150 000 for capital gains purposes and who should declare the rental income after the transfer of ownership?

Query 20 119 – Yana.


Establishing the usufruct will constitute a disposal for UK CGT.

The usufruct structure entered into by Yana’s client is a popular way of owning property in France. The main advantage is that there is...

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