Reduced social charge for UK residents selling their French second home

In the article ‘Tax increase for French homes’ Taxation (11 February 2021 page 17) I explained the effect of a French Directorate General of Public Finances (Direction Générale des Finances Publiques (DGFIP)) directive which meant that UK residents looking to sell their French second home saw their exposure to social contributions significantly increased by the end of the Brexit transition period on 31 December 2020 (from 7.5% to 17.2%). In an unexpected move the French Revenue is reverting to its pre-Brexit position. This presents an opportunity for a recap on this controversial issue.

To recap

Social security contributions known as the contribution sociale généralisée (CSG) and the contribution au remboursement de la dette sociale (CRDS) were introduced in the 1990s in an attempt to reduce the deficit of the French National Insurance scheme covering illness maternity and pension benefits.

Their legal nature (whether they are taxes or...