Brexit FAQs updated

This article was first published on Tax@Hand, and is reproduced on this blog with the authorization of its authors.

The French Tax Authorities (FTA) updated on 14 January 2022 their FAQs (in French only) regarding the tax consequences of Brexit.

Through this publication, the FTA aims to explain the French tax consequences for individuals and businesses of the UK no longer being part of the European Union/European Economic Area (EU/EEA) as from 1 January 2021. This article focuses on the main tax aspects relevant to individuals and clarifies the social contribution rate applicable to income derived from personal assets (7.5%).

The FAQs regarding UK individuals discuss the consequences of Brexit on:

  • The eligibility of UK securities for French equity savings plans (plan d’épargne en actions or PEA) (they are not eligible although they did remain eligible during a nine-month transition period starting on 1 January 2021)
  • The application of the exit tax scheme to transfers of residence from France to the UK (automatic tax deferral)
  • The availability of income tax/real estate wealth tax reductions for donations to UK non-profit organizations (the reductions no longer apply)
  • The tax treatment of real estate capital gains realized by French residents on the sale of their principal residence located in the UK
  • The social contribution rate applicable to income derived from personal assets (7.5% (solidarity levy) applicable to taxpayers affiliated with the UK social security scheme and not affiliated with a compulsory French social security scheme, as long as they are citizens or residents of the UK, France, or another EU member state. Taxpayers who have paid higher levies may obtain a refund of the overpayment amount during the statute of limitations period)
  • The obligation to appoint an accredited tax representative for real estate sales carried out in France by UK residents; and
  • The registration system in France for vehicles bought in the UK
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