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Capital gains and property income: UK residents can also benefit from CSG and CRDS exemption
Capital gains and property income: UK residents can also benefit from CSG and CRDS exemption
The French tax authorities have clarified that the exemption from social contributions known as CSG (9.2%) and CRDS (0.5%) on income from property received from 1 January 2021 can also apply to UK residents.
People, whether or not they are resident in France for tax purposes, who are covered by a social security scheme in a Member State of the European Economic Area (1) or Switzerland are exempt from CSG and CRDS on their income from assets (income from property, life annuities, etc.) and on investment income (capital gains on property, income from securities, etc.) when these are taxable in France, provided that they are covered by a compulsory social security scheme in one of these countries other than France.
(1) European Union + Iceland, Norway and Liechtenstein
In this case, only the social contribution of 7.5% known as "Prélèvement social" is due, whereas the cumulative rate of social security contributions is normally 17.20%.
People covered by a social security scheme within the European Economic Area or Switzerland benefit from this exemption.
On the other hand, people affiliated to a social security scheme in a country that is not a member of the European Economic Area are still subject to social security contributions at the rate of 17.20%.
However, since 1 January 2021, the United Kingdom has become a non-member state of the European Union and the European Economic Area as a result of Brexit.
However, the French tax authorities admit that while, in principle, UK residents no longer benefit from CSG and CRDS exemptions on income from capital assets from 1 January 2021, this exemption will continue to apply to income from capital assets received on or after 1 January 2021, in the light of the agreements governing the UK's exit from the European Union, for taxpayers who meet the following conditions:
- To be affiliated to the British social security system;
- To be nationals or residents of France, the United Kingdom or another Member State of the European Union;
- Not to be covered by a compulsory French social security scheme.
Under these conditions, income from assets is not subject to CSG and CRDS (9.7% in total) but remains liable to solidarity levy at the rate of 7.5%.
People who have wrongly paid social security contributions since 1 January 2021 can obtain a refund by submitting a tax claim within the normal time limits.
However, UK residents are still required to appoint a tax representative when they sell a French property
CM-Tax, a firm of tax lawyers with offices in Lyon and Marseille and throughout France, advises and assists its French and international clients with their tax obligations in France.
People, whether or not they are resident in France for tax purposes, who are covered by a social security scheme in a Member State of the European Economic Area (1) or Switzerland are exempt from CSG and CRDS on their income from assets (income from property, life annuities, etc.) and on investment income (capital gains on property, income from securities, etc.) when these are taxable in France, provided that they are covered by a compulsory social security scheme in one of these countries other than France.
(1) European Union + Iceland, Norway and Liechtenstein
In this case, only the social contribution of 7.5% known as "Prélèvement social" is due, whereas the cumulative rate of social security contributions is normally 17.20%.
People covered by a social security scheme within the European Economic Area or Switzerland benefit from this exemption.
On the other hand, people affiliated to a social security scheme in a country that is not a member of the European Economic Area are still subject to social security contributions at the rate of 17.20%.
However, since 1 January 2021, the United Kingdom has become a non-member state of the European Union and the European Economic Area as a result of Brexit.
However, the French tax authorities admit that while, in principle, UK residents no longer benefit from CSG and CRDS exemptions on income from capital assets from 1 January 2021, this exemption will continue to apply to income from capital assets received on or after 1 January 2021, in the light of the agreements governing the UK's exit from the European Union, for taxpayers who meet the following conditions:
- To be affiliated to the British social security system;
- To be nationals or residents of France, the United Kingdom or another Member State of the European Union;
- Not to be covered by a compulsory French social security scheme.
Under these conditions, income from assets is not subject to CSG and CRDS (9.7% in total) but remains liable to solidarity levy at the rate of 7.5%.
People who have wrongly paid social security contributions since 1 January 2021 can obtain a refund by submitting a tax claim within the normal time limits.
However, UK residents are still required to appoint a tax representative when they sell a French property
CM-Tax, a firm of tax lawyers with offices in Lyon and Marseille and throughout France, advises and assists its French and international clients with their tax obligations in France.