OnTheMarket overseas properties , Britons with holiday homes in France face paying extra 10% in tax if they sell the property following a Brexit
*Britons with holiday homes in France face paying extra 10% in tax if they sell the property following a Brexit
- *Many Britons unaware of the extra charges applied to non-EU residents
- *Brexit means British residents paying up to 48.5% in tax on selling their French holiday home
- *But rate is 39.5% if Britain votes to stay in the EU
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Britons with holiday homes in France could end up paying an extra 10 per cent in tax if they sell the property following a Brexit, experts have warned.
They suggested that Britain overseas property buyers have been protected from paying additional charges that apply to non-EU citizens. These include significantly higher capital gains tax charges on selling properties in France.
Jason Porter, of wealth managers Blevins Franks, warned: 'Britons who own a property or who are thinking of buying a holiday home in the EU perhaps do not realise the extra tax charges that could arise as a result of a Brexit.
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Britons with holiday homes in Europe could end up paying an extra 10% in tax if they sell the property following a Brexit.
'In an attempt to create a level playing field across European countries, the European Court of Justice has imposed judgements against certain states it believed were imposing inequitable taxes on non-residents compared to residents, or where a tax did not comply with the fundamentals of the EU.
'In an attempt to create a level playing field across European countries, the European Court of Justice has imposed judgements against certain states it believed were imposing inequitable taxes on non-residents compared to residents, or where a tax did not comply with the fundamentals of the EU.
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'For example, it recently prevented France from imposing a 15.5 per cent social charge on rental income on non-residents in the EU, on the basis the EU requires social security should only be payable in one state in the EU. This judgement does not apply to non-EU states.
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A Brexit means that a British resident who buys a £500,000 holiday home in France could end up paying 48.5 per cent in tax on selling the property as opposed to 39.5 per cent if Britain votes to stay in the EU.
They will first need to pay tax in France, which can they can offset when it comes to then paying tax in the UK.
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One million Britons currently own a holiday home somewhere in Europe.
In France, the charges include capital gains tax of 19 per cent, a surcharge of up to 6 per cent and social charges of up to 15.5 per cent, which equates to a maximum of 36.5 per cent. The French capital gains tax and surcharge paid can be set off against the tax due in the UK at up to 28 per cent (French social charges cannot be off set), which means a maximum additional amount of 3 per cent is payable in the UK. It means the most you will pay in total between the two countries is 39.5 per cent.
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