Act fast to claim tax rebate on French capital gains or income following change to post-Brexit law

November 8, 2023

British citizens who sold a property in France during 2021 or early 2022, or paid tax on a French income during the same period, may be entitled to a tax refund following a change of interpretation to the law in France.

Since 1 January 2019, individuals affiliated to a social security scheme in a European Economic Area country or Switzerland have been exempt from paying the CSG (General Social Security Contribution) and CRDS (Social Security Debt Repayment Contribution) in France.

However, following Brexit, from 1 January 2021 taxpayers affiliated to the UK social security system were subject to be taxed at the standard social rate of 17.2% on their French-sourced real estate income and any capital gains, rather than the lower rate of 7.5% they previously enjoyed.

Deborah Vaysse, a French Avocat specialising in French property with law firm Furley Page, said: “The good news for British citizens who have made a gain when selling a property in France or declared a French income during this period is that they may be entitled to a tax rebate.

“This is because the French tax authorities have updated their interpretation of the EU/ UK Trade and Cooperation Agreement (30 December 2020) regarding the effects of Brexit and have decided that the reduced social charge rate of 7.5% should also be applied to UK taxpayers.

“The French tax office has also confirmed that the social rate was backdated to the start of 2021, which means that UK taxpayers who sold a French property and made a capital gain in 2021 or early 2022 may have overpaid social charges and are entitled to claim a tax refund. The same may also be true for UK taxpayers who paid tax on their 2021 French income.

“To be entitled to this refund, UK taxpayers need to be affiliated to the UK National Insurance system. The deadline to lodge a claim is 31 December 2023 for property sales completed during 2021, and 31 December 2024 if the French property was sold in 2022, so it is important to act swiftly to check if you are entitled to a tax rebate.”

For more information about claiming a tax refund on French property or French income, contact Deborah Vaysse on 01227 763939.