HELPLINE: 
Daniel Butcher, a financial specialist for expats in France and founder of DTB Wealth Management, reviews the tax rules expats resident in France selling a home in the United Kingdom must follow.
“It is important to be aware of the tax obligations surrounding capital gains,” says Daniel. “Understanding these rules is the key to avoiding unnecessary penalties and ensuring compliance with both UK and French tax authorities.”
Under the France-UK Double Taxation Agreement (DTA), the UK has the primary right to tax capital gains on properties in its territory. The rate is 18-28% for residential properties, depending on income, while commercial property is 10-20%. Once sold the gain must be reported and the tax paid within 60 days.
Daniel continues: “However, what some UK property owners do not realise is that as a French tax resident you must also declare the capital gain in France, even if no additional tax is due.
“This is done in the usual tax form online, Form 2047 (the following April) and French CERFA Form 2042-C, box 3VZ.”
France’s tax authorities will calculate what the capital gains would have been if the property had been in France and issue the equivalent tax credit to prevent double taxation.
“For example, if a French tax resident sells their UK house and incurs a £20,000 capital gains tax liability, this must be paid to HMRC,” says Daniel.
“Once declared in France the authorities will automatically grant a tax credit equal to what you would pay in France, so in this example the tax credit would be £20,000.”
The only exception to the rule is when the UK property has been owned for over 30 years. In this case you do not have to declare it in France.
Expats selling property in the UK can contact DTB Wealth Management for support around cross-border tax obligations and to avoid potential complications.
