Tax representation  Brexit

Tax representation during a sale of property in France by a non-French tax resident.

In France, when a non-French tax resident, within the meaning of Article 4 B of the General Tax Code, decides to sell a property held within the territory, he or she may be subject to the obligation to appoint a tax representative.

However, this obligation does not concern non-French tax residents established in a member country of the European Union or in a country of the European Economic Area, or if the country has signed certain administrative assistance agreements with France (as is the case for Iceland and Norway).These exemptions are provided for in Article 244 2A of the General Tax Code (CGI – section 2 of 2 of IV).

This obligation also does not apply if the sale price of the property is less than 150,000 euros (per seller).

Furthermore, this obligation does not apply if the property is eligible for a rebate for the holding period, and is exempt with regard to said holding period.

As a reminder, a holding period of 22 years is required for an exemption from capital gains subject to income tax, and a holding period of 30 years is required for an exemption from various social contributions.

Therefore, British residents, who wish to sell a property whose value is greater than 150,000 euros (per seller), and not eligible for a full exemption with regard to the holding period, must appoint a tax representative as from the end of the transition period.

Effectively, under Brexit, the United Kingdom is leaving the EU as well as the EEA; a transition period has been set for the year 2020, which should end on 31 December 2020 if no agreement is reached. British residents will therefore be in the same situation as residents of third countries, and will be subject to the obligation to appoint a French tax representative when selling a property owned in France.

In addition, the BOFIP official journal, which is the administrative doctrine (BOI-RFPI-PVINR-30-20) recalls in its section 120 that a lawyer or a notary cannot be appointed as a tax representative within the meaning of Article 244 2A of CGI.

Furthermore, it recalls that, as from 1 January 2021, English residents selling their property in France will be liable for the levy provided for in Article 244 2A of the CGI in the event of a capital gain.



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