Know your tax when getting a French property, investors advised
Released on = August 9, 2007, 10:55 am
Press Release Author = Jimwatson
Industry = Real Estate
Press Release Summary = Along with Spain, France is the most popular European
destination for UK
property investors, offering culture, weather, food, wine,
seaside and countryside, city living and rural charm among its various offerings.
Press Release Body = Along with Spain, France is the most popular European
destination for UK property investors, offering culture, weather, food, wine,
seaside and countryside, city living and rural charm among its various offerings.
When it comes to making investments, there are different ways of doing it. A common
way has been to buy a property through a property
holding company established in
France in order to avoid inheritance tax. However, Fly2let.co.uk reports, this is
until recently something the inland revenue took a negative view of even if it was
intended to avoid French rather than British taxation.
The Federation of Overseas Property Developers, Agents and Consultants (Fopdac) has
pointed out that this has changed, with the last budget exempting this kind of
transaction from UK tax. Specifically, the organisation told the website, this will
apply where the companies are owned by one person, the company\'s activities are not
directly connected to the property and the property is the chief or sole asset of
the company.
However, those looking to Invest in property
in France still need to be aware of
various tax issues, states Leonie Kerswill, a tax partner at PricewaterhouseCoopers.
She said: \"While the UK rules have changed so that it is now possible to buy foreign
property through a company, it is still important that any decision to buy property
abroad and how to own it is well thought out.\"
Ms Kerswill advised that one key tip for any investor was to keep up with any
changes in tax laws and rates, be they local or national. Another tax issue of
particular importance for those looking to let out a property is the need to fill
out an overseas tax return for local or national tax in their country where the
investment is (including France) as a prompt and correct return will be required
where different countries share tax information. Then there is the need to know the
rules about inheritance taxes, sell-on taxes and to have a lawyer conversant with
these local laws.
Fopdac has stated that it expects the new Inland Revenue regulations over companies
holding property, which will be introduced next year, to be retrospective, but also
adds that a whole range of new changes are coming in France as President Sarkozy
looks to encourage more home ownership. In particular inheritance and wealth taxes,
among the highest in the world, should come down, the executive director of Leggett
Immobilier, Trevor Leggett, told fly2let.com.
If the best predictions of Mr Sarkozy\'s policies come true, those monitoring tax
rates in France will be unearthing plenty of good news for investors.
2009
