An additional thought. France can only tax any sale if you have made a gain calculated in Euros, ie converting the acquisition cost at the exchange rate in 2011, and the anticipated sales value using current/estimated exchange rates (in the absence of actual ones). Given the performance of the £ vs the € in the last 10-15 years, you might find that even if you sold when French resident, there might not be a € gain. That’s ignoring any other favourable capital gains tax treatment available from France…
Well worth getting proper advice from credible advisers who specialise in these cross channel issues (not an actual recommendation, as I’ve never used them, but firms like Blevins are well known in this field etc).
Having read the thread and rethought the situation…
Gut feeling tells me that you would do best to finish renovating your UK Residence and Sell before you Move… things in the Property Market are not set in stone… it might take years to sell… but it might take just 3 days (yep, it can happen just like that… )
We did exactly the same. Removal 2 days before completion, stayed with friends and moved over on completion day. We thought it would be the only way to be 100% sure. I also retired the day before we traveled . For us, it all fell into place quite quickly and easily, but it may not be so easy for others.
Watching Sky news business report yesterday, they were saying that UK house prices will start to fall rapidly shortly. Seems there are too many chasing too few properties to buy and they need to kickstart the market again. The OP has a french property already so will have french tax fiscal number anyway and be known to them. “Locally” means the nearest tax office that sends out the bills he already pays like Foncières and Habitation
Thanks, Jane - but the Impots link you give clearly sets out 3 criteria for fiscal residency. None of them apply to Herbert, as far as the information he has so far provided indicates. He cannot begin to comply with any of the three until he has first succeeded in obtaining a long-stay visa from the French Consulate in London. As Stella points out, he needs to use this time to complete the works on his UK house; sell it; and then begin the processes of setting up residency here in France. Until that is complete, he maintains principal residency in the UK.
I think we’re all interpreting the information @Herbert provided in different ways (myself included).
Herbert’s plan is to move to France in 2024 and then sell his UK house after it has been renovated:
I presume Herbert means exactly what he says, and therefore he has already dealt with (or is dealing with) the application for the correct visa. And health cover, and the rest of it!
@George1’s link covers the risk that the French tax authority may not allow the period of grace usually allowed (though this seems unlikely to be the case).
This forum is amazing and exceptionally useful!
Thank you all for answers.
@Bosendorfer and @Porridge, I appreciate your input, but I don’t need Visa because I have passports from both the EU and the UK. I believe my official residency in France will begin either when I start working full-time locally or when my belongings arrive with a removal van.
Indeed, question is very open and honest. I mean exactly what I ask. Asking for advice on correct timeline when to do what to avoid being taxed.
@JaneJones, thank you for explaining and sharing the link to gouv.fr.
@larkswood12, could you explain more about the statement regarding “proceeds used to buy your new main residence being disallowed”? It sounds a bit strange to me.
@David_Sprado, thank you for the warm welcome, and @hairbear, I really appreciate your practical advice! Also, thank you to @George1 and @Stella for the helpful input.
@Shiba, although I’m registered with local tax offices, I feel more comfortable asking this forum for advice.
The capital gain on the proceeds is disallowed means it’s exempted from tax. E.g. sell Uk house 200K with 50K capital gains. Use 100K to buy france principal Maison = 50% therefore 50% of your capital gain is disallowed = exempted.
I believe it is allowed if you buy the new principal residence before selling the old principal residence within the time frame, but like I said I’d get a health check on that as I don’t have all the details in my head on this one at the moment.
Ah! Well that information totally changes your question, Herbert. I wish you had explained your situation more fully at the start!
Your original two questions (which concerned when to sell your house to avoid French CGT; and secondly, wanting to clarify at what point a UK house may be considered to be sold) is, you now say, secondary to the fact that next year you will be employed in France; living in your French apartment; and subject to French tax from the day you start work here. So that answers your question.
As to the second question, a house is legally sold when Contracts are exchanged on a UK property. From that point it becomes legally the responsibility of the buyer; and they have an enforceable debt for payment to you, due upon Completion. Hope that helps.
@shiba surely if too many chasing too few properties to buy that would lead to increased prices wouldn’t it? Basic supply and demand, unless I’m missing something
Depends on the people chasing and their money limits with mortgages plus often who can move the fastest rather than first timers with offers that take weeks to complete the paperwork.
But greater numbers of folks ‘chasing’ wont simply encourage more folks to sell their properties. The market being flooded with property with more people wanting to sell leads to weaker property prices. More folks ‘chasing’ fewer properties drives up prices. Unless there is a significant catastrophe in the UK, I can’t see property prices tumbling. There’s just too much at stake to allow that to happen.
It’s a very brave observer that makes forecasts on any market, though I guess it depends on how you define tumbling.
I recall selling a house in 2008, undercutting similar houses by about £20k as we were going overseas and wanted it sold. Two years later our buyers couldn’t get it sold at 10% below what they paid for it.
Edited to add: markets don’t really care about what’s at stake, they are what they are.
Yes there are always correction periods along the way, but I wouldn’t really use the term ‘tumbling’, but I guess everyone’s scale may be different. I do find alot of news stories a tad sensationalist, trying to drive emotion and interest, and quite often unfounded speculation on topics such as house prices. Regardless, key point for me at least is the longer term trajectory.
Well, if @Herbert is in the process of renovating his UK Residence prior to moving out of UK… I suspect he’s crossing his fingers that he’ll get back what he’s spent, plus quite a bit more…
@Herbert is your date for moving out of UK “set in stone” or flexible ???
hi @Stella
yes date is negociable and I pray it stays this way.
I am reasonably good with my hands so many simple things in house I refresh myself, which helps to save ££ during this massive update.
So, indeed it would be unwise to rush this sale and my relocation.
Pound Set For Another Weekly Gain on the Euro, Helped by Surprise House Price Rise
The British Pound looks set to score a second consecutive weekly gain against the Euro, aided by a surprise rise in UK house prices, pushback against rate cut bets by Bank of England’s Megan Greene, and a large undershoot in Eurozone inflation.
The Nationwide house price index revealed another monthly gain in November, rising by 0.2% month-on-month and defying expectations for a fall of -0.4%.
This whittles down the annual loss to -2.0% and suggests the house price collapse resulting from rising interest rates that many had feared is still some way off.
Nationwide reports new signs of strength in the housing market, suggesting the impact of previous Bank of England rate hikes might not be as severe as economists might have been expecting.
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. For us, it all fell into place quite quickly and easily, but it may not be so easy for others.
