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French residents are liable to capital gains tax (CGT) when selling worldwide property and investments. Some exemptions and reliefs are available.

If you are resident in France when you sell assets, you are liable for French tax on the gains, even the assets are held outside France.   Assets in France are always taxable in France, even if you are not resident.

Both immoveable property (real estate) and moveable property (investments) are liable to tax, though the regimes are very different.

France capital gains tax on property

The standard capital gains tax rate when selling property is 19%.  

However, progressive surcharges are added to gains over €50,000, which range from 2% to 6%.  This makes a top tax rate of 25% (before social charges, see below).

Exemptions and reliefs

You do not need to pay capital gains tax when selling a family home, provided it is your habitual and actual residence at the time of sale.

You may be given up a year’s leeway in which to sell after moving out, but have to meet certain conditions.  So be careful with the timing of the sale or you may lose the main home relief completely and have to pay tax in full.

There can be other exemptions.  For example, if you receive a state pension and your wealth and income are below a certain level you may escape capital gains tax on property.  Likewise, if you invest the proceeds into a main home and did not own one the previous four years.  So it is worth checking to see if there are any exemptions that apply to you when selling a property.

In any case, a taper relief system reduces capital gains tax the longer you have owned the property, starting from the sixth year of ownership.  After 22 years no tax is due at all.

For more information, read our article “How much capital gains tax will you pay when selling a property in France?”

France capital gains tax on investments

Gains made on the securities likes shares, corporate bonds, loan stocks etc, are not liable to “capital gains tax” as such, but are taxed as investment income (together with bank interest and dividends).

From January 2018 investment income is taxed at a flat rate of 30%, which is beneficial for higher earners.

You can opt for investment income to be taxed at the scale rates of income tax.  In this case, if you hold shares for at least two years 50% of the gain is tax free. This rises to 65% for shares held for over eight years. Extended taper relief can apply for some types of shares.

Social charges

This is France, so social charges are due on top of tax, at 17.2% for investment income and gains.

This does not apply to the 30% flat rate for investment income though, since that already includes social charges. But if you opt for the income tax rates, you will also need to pay social charges.

Gains made on the sale of property are also liable to social charges, over and above the rates outlined above.  Again, a taper relief system reduces the charges by 1.65% from year six and by 9% from year 23, with total exemption after 30 years.

Note that a new lower social charges rate of 7.5% is now available to those who are covered under the health system of another EU/EEA country, which applies to you if you hold Form S1 or are not resident in France.

Tax planning advice

If you are selling assets, take tax advice to make sure you understand your tax liabilities and will benefit from any exemptions or taper relief available to you. 

If you thinking of buying assets, take advice before you do.  There may be ways to hold these assets that would make them, and any income generated, more tax efficient in France.

Contact your local Blevins Franks adviser for personalised advice

The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual is advised to seek personalised advice.