French socialism in action

Wookster

Francois Hollande announces French tax grab on holiday homes

http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/9377307/Francois-Hollande-announces-French-tax-grab-on-holiday-homes.html

The big point is that the increase in tax is retrospective, going back to 1 January 2012 which is quite a significant move and no doubt will go some way to making France even less competitive.

Masomnia

Meanwhile:

http://www.telegraph.co.uk/finance/financialcrisis/9374269/France-halves-its-growth-forecast.html

BobQ

Wookster wrote: »

http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/9377307/Francois-Hollande-announces-French-tax-grab-on-holiday-homes.html

The big point is that the increase in tax is retrospective, going back to 1 January 2012 which is quite a significant move and no doubt will go some way to making France even less competitive.

Challengable under EU law as preventing freedom of movement?

kabayiri

Why should the UK government challenge this?

If this tax change makes France less desirable for 2nd home owners going forward, these people may look elsewhere including Jersey or different parts of the UK.

I know it sounds selfish but a less attractive France means UK looks more attractive. Dog eat dog, but we need wealthy people spending here.

pinkteapot

UK government challenged it because a lot of wealthy City folk have holiday homes in France and the new French law would have been somewhat unpopular. Tories shmoozing City boys - who would have thought it.

EDIT: Here's a genuine reason the government has for contesting it from the original Telegraph article:

Under the double taxation system, UK residents deduct any tax paid at source in France on French gains from the UK tax on the same gains. But if the French tax is higher, they will receive no rebate.

Paul Smith, a partner at accountants Blick Rothenburg said: "The UK Government is subsidising the French. It will be collecting less income tax off taxpayers who have houses in France."

kabayiri

pinkteapot wrote: »

UK government challenged it because a lot of wealthy City folk have holiday homes in France and the new French law would have been somewhat unpopular. Tories shmoozing City boys - who would have thought it.

They can still have holiday homes in France. They just have to pay a bit more. Or are we saying they are so hard up this would tip them over the edge. I doubt it somehow.

Selfishly, I want these people buying property in UK not France, so that they spend their money here. France's loss should be our gain.

joe_blotts

Why don't we just tax foreign holiday homes in the UK?

FTBFun

joe_blotts wrote: »

Why don't we just tax foreign holiday homes in the UK?

Rental income is taxable

Capital gains are taxable also.

But often under the various income tax treaties around the jurisdiction where the property is situated as primary taxing rights on that property - as is the case here, hence why rental income and capital gains tax is payable to the French authorities.

It is not the UK Government subsidising the French, despite the earlier claims. Despite that, I'd be suprised if that was legal under European law as its discriminating between French and other EU nationals.

chewmylegoff

who cares, i am certainly not worried about the plight of some people who own second homes in france, and whose profits might be subject to higher tax. boo hoo.

ecoguy

Sorry, I'm a bit new to UK/EU tax law, but how can they legally apply a retroactive tax? Seems totally unfair at best and downright illegal at worst.

Kennyboy66

Great to see the Tories going into bat for their wealthy chums.

We are truly all in this together.

I wouldn't say no to higher taxation on second homes in this country, instead of the numerous ludicrous loopholes which means anyone with an ounce of sense can avoid both tax on the rental income (if its mortgaged) and capital gains tax if you make it your main home for a few months.

Instead we pile taxes on to people working and creating stuff.