CGT on sale of French Holiday home for UK non tax payer

reet4les

I have recently sold a jointly owned French holiday home and understand that my spouse and I are liable for UK CGT. I have included my share of the CG in my SA online return but my spouse is a non taxpayer due to being below the BRT threshold and is not required to file a return each year. I understand that she will be in the 18% band for CGT but is this mitigated in any way due to being below the BRT threshold? How does she declare and pay the CGT owed if she doesn't complete a tax return?

purdyoaten2

If she has a capital gain she will have to complete a tax return. As with any U.K. resident she will have a £6000 exemption and will pay the next 37700 of the gain at 18% rate with the remaining amount at 28%. The personal allowance of 12570 is not available to use against capital gains.

Like you, she will be able to claim foreign tax credit relief on the lower of French tax paid or U.K. tax due on the gain which would necessitate completion of the foreign section of the return.

nigelbb

You are liable to French taxation & social charges before any UK CGT would be payable. French tax is 19% + 17.5% social charges ie a total of 36.5%. Depending on how long you have owned the property there is a sliding scale of reductions so that if you have owned the property for 22 years no tax is payable & after thirty years no social charges are payable.

https://www.frenchentree.com/living-in-france/french-tax/understanding-french-capital-gains-tax-what-you-need-to-know/

Jeremy535897

Remember that the French social charge is not treated as tax for the purposes of the double tax relief as a credit against UK tax.