Alpine property specialists, Erna Low Property want to get the message out to international owners of property in France, that there is no cause for concern about the 15% French Social Charge, requested by the French government, when selling their French property.
The new tax, introduced by Francois Hollande’s government has been very controversial. However it is now apparent that non-French tax residents will benefit from their non-French residency and will avoid this tax very shortly. The recent European court case in October, upon which the Advocate General expressed an opinion that the charge by France is illegal should reassure those sellers concerned about the legislation.
David Anderson Solicitor Advocate, Chartered tax adviser and barrister (unregistered) at Sykes Anderson Perry Limited Solicitors and Chartered Tax Advisers in London comments: “A relevant case challenging France’s position is now before the European Court, Ministre de l’Economie et des Finances v Gerard de Ruyter (Case C-623/13).
“The Advocate General, whose views the Court normally follows, has given his opinion on 21 October 2014, which is that France has acted illegally in making this charge on non-residents. It seems very likely the European Court, when it makes its final decision shortly (before end 2014), will take this view.
“This should open the way for UK and other non-French sellers resident in the EU to claim back the social charge from the French Fisc. UK residents who have in the past couple of years sold French property have been forced to pay French social charges at the rate of 15% on their gain, with some taper relief.
“These social charges have in many cases been more than the French Capital Gains Tax and have been deducted by the Notaire on completion. The French Social Charge cannot be deducted against UK capital gains tax (because it is not a ‘tax’) and so is a real and unwelcome cost for UK sellers.”
For more information, go online at: www.ernalowproperty.co.uk