In a surprise U-turn, the French tax authorities have just published some good news for British owners of French property. One tax expert described it as “Fantastic news for British owners of French homes”.
In essence, UK residents and British expats in France will now have to pay a reduced rate of 7.5% for their Prélevements Sociaux, down from 17.2%. This takes them back to the pre-Brexit rate that was charged. To qualify you must be registered with the British social security system, and must not be registered in the French social security system.
Trevor Leggett comments “This is great news as it gives pounds back in the pocket of our British clients. A rough calculation shows that if you earn an annual rental income of 10,000 euros then you will save around 1,000 euros on your liability, similarly if you have CGT to pay then the savings may run into the thousands or even tens of thousands. Even better, this is a retroactive credit, if you are a British resident seller who paid the higher rate tax you should be able to claim a refund for the overpaid tax.”
As usual, there is bound to be confusion over the implementation of this change and we strongly advise clients to employ an accountant or tax specialist to guide them.