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You are a british citizen


Taxation

Changes are coming on 1 January!

On 30 December 2020, the EU and UK signed a trade and cooperation agreement which will determine the rules that apply from 1 January 2021 to relations between the EU and the UK in a number of areas.

Since 1 January 2021, although an agreement has been reached, major changes must be taken into consideration.


You are concerned if you hold British shares in your share savings plan; if you are eligible for exit tax arrangements when moving to the UK; if you want to make donations to non-profit organisations; if you possess property assets in the UK.  

If you did not find the answers to your questions on this page, you can contact us at the following address : brexit.entreprises@finances.gouv.fr


  • Imprimer

Frequently

asked questions


  • What will the UK’s position be regarding social levies on income from assets ?

  • From 1 January 2021, UK residents will no longer be exempt from the general social security contribution (CSG) or the social security debt repayment contribution (CRDS) assessed on income from assets, since the UK will no longer be subject to European Regulation (EC) No 883/2004 on the coordination of social security systems.

    As a result, income from assets will be subject to social levies at an overall rate of 17.2%.


  • Can I continue to make donations to British non-profit organisations (NPOs) and be eligible for income tax/property wealth tax reductions under France's Patronage Act ?

  • Gifts and payments made to NPOs headquartered in the UK will no longer be eligible for income tax or property wealth tax reductions.

    For the record, the only eligible foreign organisations are those whose headquarters is in a Member State of the European Union (EU) or in another State that is a party to the agreement on the European Economic Area (EEA) and has signed a mutual administrative assistance agreement with France to fight tax evasion and tax avoidance.


  • How will exit tax arrangements apply for transfers of residence to the UK (residence already transferred or to be transferred) ?

  • Under the exit tax system, a transfer of tax residence outside France leads to immediate liability for income tax and social levies on unrealised capital gains on ownership interests, securities or rights, receivables originating from an earn-out clause and capital gains subject to tax deferral (Article 167 bis of the French General Tax Code).

    A stay on taxation is granted by operation of law for departures before 1 January 2019, where the taxpayer transferred his/her tax residence from France to a Member State of the European Union (EU) or to another State that is a party to the agreement on the European Economic Area (EEA) and has signed a mutual administrative assistance agreement to fight tax evasion and tax avoidance and a mutual tax recovery assistance agreement with France. In other cases, the stay on taxation is granted at the express request of the taxpayer and in return for guarantees.

    For departures on or after 1 January 2019, the stay on taxation takes effect by operation of law, without the need for guarantees, for departures to a Member State of the European Union (EU) or to any State or territory that has signed a mutual administrative assistance agreement to fight tax evasion and tax avoidance and a mutual tax recovery assistance agreement with France.

    Since the UK has legal instruments regarding assistance for the recovery of tax claims and the fight against tax evasion similar to those that exist between EU Member States, UK operators will not have to designate a tax representative and the automatic stay on taxation without the need for guarantees continues to apply.


  • What tax arrangements will apply to capital gains on property made by an individual seller who becomes a French resident after selling his/her former main residence in the UK ?

  • All capital gains on property realised by a resident in France will be taken into account in the calculation of income tax and social levies, whether the property sold is located in France or the UK. However, if it is located in the UK, under the Franco-British tax treaty of 19 June 2008, the taxpayer receives a tax credit equal to the UK tax paid on the same gain, which can be deducted from the corresponding French tax. If the capital gain on a UK property is exempt from tax, no tax credit will be granted in France under this Franco-British tax treaty.

    However, the exemption for the sale of a main residence may apply where the property was the seller’s main residence until it was sold, where the property remained unoccupied until the sale and where the sale took place within a normal timeframe (see section 190 of BOI-RFPI-PVI-10-40-10 for information on how this is assessed).


  • Will people whose tax residence is in the UK, like other people whose tax residence is in a non-EEA State, be obliged to appoint an accredited tax representative when selling properties in France, in accordance with Article 244 bis A of the French General Tax Code?

  • According to the arrangements provided for by Articles 244 bis A and 244 bis B of the French General Tax Code, since the UK is no longer part of the EU or EEA, a seller whose tax residence or headquarters is in the UK will have to appoint a tax representative.

    However, natural persons who have their tax residence in the UK do not have to appoint an accredited representative when they sell a property in France if:

    • the selling price is €150,000 or less, or
    • they have a full tax exemption on the capital gain realised, in terms of both income tax and social levies, because of the length of time they have owned the property, in accordance with Article 150 VC(I) of the French General Tax Code and Article L.136-7(VI)(2) of the French Social Security Code, or
    • they have the capital gains tax exemption provided for by Article 244 bis A(I)(1) of the French General Tax Code in respect of the sale of their previous main residence (see BOI RFPI-PVINR-30-20, nos. 170-225).

  • I have bought a vehicle in the UK that I would like to register in France: are there new requirements post-Brexit?

  • Post-Brexit, customs formalities must be completed every time you trade with the UK.

    The new vehicle registration system means that you must immediately register your vehicle or obtain a WW provisional registration certificate if the registration file is not complete.

    Even if it is a second-hand vehicle, you must complete customs formalities and pay duties and levies on its value on the day it enters EU territory. That value may be the value stated on the invoice, or the value used as the basis for a transaction. If you did not purchase the vehicle, the tax will be based on its residual value, which is in general that indicated in the Argus de l’Automobile.

    After the formalities have been completed, customs will provide you with an 846A certificate, which will allow you to obtain a registration number in a normal series for your vehicle.

    You can find useful information on the French customs website at the following addresses:

    These pages set out all the steps required, including those to be taken with respect to other administrations.


  • I hold British shares in my share savings plan (PEA). What will happen after Brexit ?

  • To be eligible for PEA share savings plans and PEA-PME share savings plans for small and medium-sized enterprises, shares must have been issued by companies whose headquarters is in a Member State of the European Union (EU) or in another State that is a party to the agreement on the European Economic Area (EEA) and has signed with France a tax treaty containing an administrative assistance clause with a view to combating tax evasion and tax avoidance or a mutual administrative assistance agreement to fight tax evasion and tax avoidance (Article L. 221-31(I)(4) of the French Monetary and Financial Code and Article L. 221-32-2(5) of the same code).

    This condition relating to the headquarters of the company issuing the securities is assessed on an ongoing basis. As a result, securities issued by UK companies will no longer be eligible for PEA and PEA-PME plans.

    Holding such securities in a PEA or PEA-PME plan would therefore be a breach of the plan’s operating rules, and would in principle lead to its closure (Article 1765 of the French General Tax Code).

    However, French ordinance no. 2020-1595 of 16 December 2020 and its implementing order of 22 December 2020 establish a 9-month grace period from 1 January 2021 during which those securities remain eligible for PEA-PME plans, to give holders the time necessary to resolve the situation (i.e. to sell the securities or transfer them out of their plans).

    If you are a UK resident, the rules regarding taxation of your PEA in the event of withdrawal, redemption or closure remain unchanged. Dividends received within the plan are not subject to the 12.8% withholding tax provided for in Article 119 bis (2) of the French General Tax Code except in the specific case of dividends paid by unlisted French companies.