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.
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