Brexit news: British expats set to save thousands after France scraps post-Brexit rule | United Kingdom | News
Tax authorities across the Channel have announced that British residents and British expatriates in France will no longer have to pay French social charges (social security contributions) at the full rate of 17.2%. This on condition that they are already affiliated to the UK social security system and are not dependent on that of France.
It includes current and future S1 holders whose healthcare is paid for by the UK.
From now on, these people will only pay a solidarity tax of 7.5%. It was like that before Brexit.
The payroll tax cut comes after European and French court rulings that said CSG and CRDS charges – which help fund France’s social security system – should not be paid by people linked to another’s system. European country.
Cross-border tax practitioners hailed the news as “fantastic” for Britons renting a gite or selling a second home in France as social charges are levied on net rental income and capital gains.
This means that if a gite generates net rental income of £4,130 (€5,000) per year, then after 1 January last year the social charge would have been £710 (€860). However, they will now only pay £309 (€375).
The savings are believed to be greater for someone who has to pay capital gains tax on a second home or French investment property.
The capital gain in France is amortized over a period of 22 years and the social charges begin to decrease after five years of detention. This reduces to zero after 30 years.
If after the allowance you still have social charges to pay on a gain of £82,610 (€100,000), you will now be charged £6,195 (€7,500) instead of £14,208 (€17,200) .
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To qualify, people must be citizens or legal residents of the UK, France or another EU member state and not dependent on the French social security system.
The French tax authorities have confirmed that Britons who have been wrongly charged the higher rate since its introduction on January 1, 2021, can ask to have their money back.
Jason Porter, of Blevins Franks, which provides specialist financial advice to British expats in France, told the Complete France website: “This 9.7% reduction in social security charges is obviously fantastic news for UK nationals with low incomes. and rental gains.
“The fact that those who have already paid excess social charges in previous years can recover it is very welcome.
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“It’s always been frustrating that social charges can’t be offset under the UK-France double tax treaty, but at least the rate is now reduced to 7.5 per cent.”
Fabienne Atkin, French legal services lawyer at Ashtons Legal, told Complete France: “This should provide some comfort for people selling their French holiday home.
“However, there are some reservations. For example, it will have to be established that the sellers are indeed affiliated to the British national insurance system and that they are not obliged to contribute to the equivalent French system.
Ms Atkin added that the post-Brexit requirement to appoint a professional tax representative remains in place. This applies to those selling a French property for over £123,915 (€150,000) which is not their primary residence.
This agent verifies that the correct amounts of capital gains tax and payroll taxes are paid. This is a requirement for all non-residents from outside the EU.
Ms Atkin said: ‘It should be borne in mind that their fees can vary from around 0.5% to 1% of the sale price.
To claim it, you must make a “complaint” to the competent tax authorities.
For a non-resident claiming rebates on rental income which would go to the Tax Department for non-resident individuals.
If the complaint concerns a payment on a capital gain on real estate, you must contact the tax office responsible for the area where the property is located.