Selling holiday home in France

lindahh4

I co-own a holiday home in France with my brother that we bought 24 years ago. We both live and work in the UK and should get £30000 each from the sale. We have been told that we will have to pay Capital gains tax in the UK & between them and France we are paying lots of taxes and costs. We both earn £30000 a year so we are not wealthy and had hoped for a little nest egg. Do you have any idea how much roughly we will pay in the UK and if this must be paid at once?. Thank you

Sam_666

HMRC got website full of information, so start from there.

Bigphil1474

Helpful response. 

OP, I'm no expert so you'll need professional advice, but this is how I understand it. You basically have to pay 18% CGT (on your tax bracket for your income) on any gains. That's the difference between the price you paid for the property and the price you sell it for. So if you bought it for £20k and sell it for £60k, that would be £40k that you'd pay 18% in CGT. You do get an allowance which is £3k for each share.

So in the example above, you'd be getting £30k back as your share, but only £20k is taxable gain, minus your £3k allowance, leaves £17k of which you pay 18% = £3,060. That £17k added to your taxable income is £35k (£30k income - £12k tax free allowance + £17k taxable gain ) so you wouldn't pay a higher rate of CGT on anything. 

There are also some allowable costs afaik, but i think that would be anything like adding an extension, rather than repairs or maintenance costs. Not too sure on that aspect.

You do need to report the gain within 60 days.

swingaloo

You need a really good solicitor in the UK that understands the French property selling system.

Having just been through it ourselves it was a nightmare and so many different costs we had not anticipated.

As far a CGT goes, I may be wrong but I think if you have owned the property for over 22 years you will only need to pay CGT in the UK and not in France.   Out costs for selling came to nearly 50% of the house value but there were probate costs as well. 

But I cant stress enough how important it is to get a good representation over here and preferably a French speaking solicitor as just dealing with the paperwork was a nightmare for us.  Be prepared for it to move slowly as well, ours took over 18 months.

user1977

swingaloo said:

You need a really good solicitor in the UK that understands the French property selling system.

Why would they need a (presumably qualified in dealing with French residential property) solicitor in the UK? Surely it's going to be much easier to find one in France!

swingaloo

user1977 said:

swingaloo said:

You need a really good solicitor in the UK that understands the French property selling system.

Why would they need a (presumably qualified in dealing with French residential property) solicitor in the UK? Surely it's going to be much easier to find one in France!

We had to have both and getting the French one to deal with the UK one was a nightmare. So slow. Even when the sale was complete getting the money sent over was a pain.

user1977

swingaloo said:

user1977 said:

swingaloo said:

You need a really good solicitor in the UK that understands the French property selling system.

Why would they need a (presumably qualified in dealing with French residential property) solicitor in the UK? Surely it's going to be much easier to find one in France!

We had to have both

Why would you have to have both if the transaction is purely the sale of the French property?

poseidon1

lindahh4 said:

I co-own a holiday home in France with my brother that we bought 24 years ago. We both live and work in the UK and should get £30000 each from the sale. We have been told that we will have to pay Capital gains tax in the UK & between them and France we are paying lots of taxes and costs. We both earn £30000 a year so we are not wealthy and had hoped for a little nest egg. Do you have any idea how much roughly we will pay in the UK and if this must be paid at once?. Thank you

With sales of foreign property your primary CGT exposure arises in the country the property is located, with a credit for foreign cgt paid against any UK CGT liabilty on the same asset

In your case taxation of French 2nd property disposals appear to be dealt with under income tax and social security codes per article from Sotheby's estates below

https://share.google/qM8pgsxhMzx00N49x

If I understand this correctly, it appears your gain might escape the primary income tax charge at 19% for ownership exceeding 22 years but the 17.2% social security charge  may still be in point. No doubt the French solicitors handling the sale will be settling the French tax liability on your behalf, so it is how you deal with UK HMRC tax compliance subsequently.

As regards UK tax reporting, contrary to Bigphil1474's post there is no 60 day post sale reporting for foreign property disposals.

Thankfully you are required to report the disposal in your 2025/26 tax return. The filing deadline for this is 31 January 2027 with any tax payable also due on this date, so you have plenty of time to ascertain any UK tax exposure - see article below

https://www.dnsassociates.co.uk/blog/capital-gains-tax-on-overseas-property#:~:text=Reporting and Paying CGT on,tax year the sale occurred.

As far as working out any UK tax exposure that is the job of a UK tax accountant ( not a solicitor!).
You and your brother should enlist the services of a tax adviser from a Chartered Accountancy firm with competency in cross border tax compliance.

Such an adviser can determine whether or not a credit can be claimed for any French taxes paid on the property proceeds, and assist you both in the preparation and submission of your UK tax returns.

Please note, in calculating the gains under UK tax rules all associated costs of sale including the accountants fees for doing the calculations, are tax deductible from the gross proceeds.  This coupled with any credit due for French sales taxes at source could hopefully minimise your overall UK tax exposure.

First task therefore, is to enlist a suitable tax adviser in readiness for crunching the numbers when the sale completes.


Incidentally on an entirely separate point, your proceeds will be denominated in Euros. To avoid excessive exchange rate fees and commissions, you could explore setting up Wise currency accounts  ( if you dont already have one ) to receive the proceeds in Euros so that you can minimise fees and time the conversion to sterling at your own convenience.

See below Wise's handy blog.

https://wise.com/gb/blog/selling-property-in-france#:~:text=We'll even look at how Wise (,saving money on fees and exchange rates.