You have settled in France after Brexit, you are French tax resident, and you have just sold \u2014 or are about to sell \u2014 the house or flat you still owned in England, Scotland, Wales or Northern Ireland. Two tax authorities now look at the same sale: HM Revenue and Customs in the United Kingdom, because the bricks and mortar stand on British soil, and the French tax administration, because you live in France and France taxes its residents on their worldwide gains. Many British sellers discover this double claim only when the French tax office sends a reassessment, sometimes years later, with income tax, social charges, a surtax on high gains and late-payment penalties. This guide explains, step by step, which country taxes what, how the France\u2013United Kingdom double tax treaty of 19 June 2008 divides the gain, how France calculates the taxable amount and grants a tax credit for the British tax, which returns you must file and within which deadlines on each side of the Channel, and how to challenge an excessive or doubly-taxed bill. Every French legal term is explained as it appears, all decisive propositions rest on statutory texts and published case law quoted word for word, and the practical lessons come from a real court decision about a French resident who sold a house in London.<\/p>\n
The starting point is your French tax residence. Under Article 4 A of the French General Tax Code<\/a>, “Les personnes qui ont en France leur domicile fiscal sont passibles de l’imp\u00f4t sur le revenu en raison de l’ensemble de leurs revenus.” In plain English: a person whose tax home is in France is liable to French income tax on the whole of their income \u2014 and, by extension, on worldwide capital gains, including the gain on a house in London, Manchester, Edinburgh or Belfast. Your domicile fiscal (tax home) is defined by Article 4 B of the same Code<\/a>: “Sont consid\u00e9r\u00e9es comme ayant leur domicile fiscal en France au sens de l’article 4 A : a. Les personnes qui ont en France leur foyer ou le lieu de leur s\u00e9jour principal”. If your family home (foyer) or your main place of stay is in France, you are French tax resident even though you kept a British passport and a UK property. The French administration confirms this worldwide logic for sellers: impots.gouv.fr explains<\/a> that a French resident selling a building abroad is, absent a treaty, taxed just as if the property stood in France; that treaties normally give the State where the building stands the right to tax the gain; and that a treaty may also preserve taxation in France on top of taxation in the State where the property is located.<\/p>\n That treaty is the Convention between France and the United Kingdom signed in London on 19 June 2008, published by Decree No 2010-20 of 7 January 2010. Its capital gains article is Article 14, whose first paragraph reserves the taxation of gains from immovable property to the State where the property is located. Your UK house is an immeuble (real property) situated in the United Kingdom, so the gain is taxable there: the United Kingdom has the primary right to tax it under its own capital gains tax rules for non-residents. This is not an exemption for France. The treaty lets the United Kingdom tax the gain first, and then organises how France taxes it again while eliminating the resulting double taxation through a credit mechanism described in Part II. One further treaty subtlety deserves attention if you left the United Kingdom recently. Paragraph 6 of the same Article 14 preserves a six-year tail, leaving each contracting State free to tax under its domestic law gains realised by a person who is resident there in the year of disposal or was resident there at any time during the previous six tax years. In practice, if you were UK resident at any point in the previous six tax years, British law may still catch the disposal even after your departure, alongside French taxation. Readers facing the mirror situation \u2014 UK residents selling a French holiday home \u2014 will find it analysed in our companion guide on selling a French holiday home as a UK resident<\/a>, where the roles of the two States are reversed.<\/p>\n On the British side, the compliance burden is immediate and strict. Since 6 April 2020, GOV.UK requires<\/a> vendors to report and pay any Capital Gains Tax due on UK residential property within 60 days of completion of the sale. The same page warns that interest and penalties apply for late reporting and payment. This is the UK Capital Gains Tax on UK property return \u2014 a standalone online filing with HMRC, separate from the annual Self Assessment return, due within 60 days of completion (the legal transfer, not the exchange of contracts). You must file it even where computations show little or no tax, because losses, reliefs such as Private Residence Relief for periods when the house was your main home, and the annual exempt amount must be declared to be recognised. Keep the completion statement from your solicitor or licensed conveyancer, the original purchase price in pounds sterling, improvement invoices, and evidence of periods of occupation and letting: the French administration will later ask for the same documents, and consistency between the two files is your best protection against a challenge on either side.<\/p>\n The most expensive mistake British sellers make is assuming that the house they just sold was their r\u00e9sidence principale (main home) and therefore exempt. French law does exempt the main home: Article 150 U of the General Tax Code<\/a> taxes gains on buildings and land, but its paragraph II lists property “Qui constituent la r\u00e9sidence principale du c\u00e9dant au jour de la cession”. The exemption turns entirely on one factual question: was the sold property your main, habitual, effective home on the day of the sale? A published judgment of the Lyon Administrative Court of Appeal answers that question for facts almost identical to yours, and the seller lost. In CAA Lyon, 27 April 2023, No 21LY03673<\/a>, “l’administration a tax\u00e9 \u00e0 l’imp\u00f4t sur le revenu la plus-value immobili\u00e8re r\u00e9alis\u00e9e lors de la cession par l’int\u00e9ress\u00e9, le 10 f\u00e9vrier 2014, d’un immeuble \u00e0 Londres (Royaume-Uni) au prix de 618 000 livres sterling, soit 741 600 euros apr\u00e8s conversion.” The seller argued that the London house had been his main home because he only became French resident again in 2014, kept declaring French-source income to the non-residents tax office until 2013, and still received personal post in London until February 2014. The court examined the whole picture and concluded: “Par suite, les \u00e9l\u00e9ments avanc\u00e9s par M. A… ne sauraient suffire \u00e0 \u00e9tablir que l’immeuble londonien constituait sa r\u00e9sidence principale au jour de la cession.”<\/p>\n Why did his evidence collapse? Because the administration proved, as the Lyon court records<\/a>, through international administrative assistance, that the London house had been let in 2010, 2011 and 2012, while the taxpayer’s 2013 and 2014 French returns gave an address in Is\u00e8re, his future wife declared the same French address, and three notarial deeds from 2011 to 2013 for seasonal-rental flats described the couple as residing in that French mountain village. Three lessons follow for your file. First, letting the property in the years before the sale destroys the main-home narrative: a rented house cannot be your habitual home. Second, the address on your French tax returns, your spouse’s returns, utility bills, council tax records and notarial deeds outweigh a forwarding address or a few retained letters. Third, the court accepted that France could tax the gain at all \u2014 the seller, tellingly, did not even dispute that France could tax the gain at all \u2014 M. A…, “qui ne conteste pas que la plus-value en litige pouvait \u00eatre impos\u00e9e en France”. So if you already live in Paris, Lyon, Nice or a Dordogne village when you sell the UK house, do not claim the main-home exemption for it. Narrower exemptions exist in French law \u2014 for elderly or disabled sellers of modest means, for a first sale followed by reinvestment in a main home within 24 months, for sales below 15,000 euros \u2014 but each carries strict conditions of income, disability status, timing and reinvestment that rarely fit a British family selling a UK house from France. Claim one only with documentary proof for every condition, because an unjustified exemption draws the 40% deliberate-failure surcharge examined in Part II.<\/p>\n The French calculation starts from a simple statutory formula. Under Article 150 V of the General Tax Code<\/a>, “La plus ou moins-value brute r\u00e9alis\u00e9e lors de la cession de biens ou droits mentionn\u00e9s aux articles 150 U \u00e0 150 UC est \u00e9gale \u00e0 la diff\u00e9rence entre le prix de cession et le prix d’acquisition par le c\u00e9dant.” Sale price minus purchase price. For a UK property, both prices were paid in pounds sterling, and the Lyon court states the conversion rule<\/a> you must apply: prices “en euros, le cas \u00e9ch\u00e9ant en convertissant en euros, sur la base des taux de change applicables respectivement \u00e0 la date d’acquisition ou de cession, les prix qui ont \u00e9t\u00e9 r\u00e9gl\u00e9s au moment de ces op\u00e9rations en devises.” Each price is converted at the exchange rate on its own date \u2014 purchase price at the rate on the purchase date, sale price at the rate on the sale date. The consequence is decisive and often misunderstood: “les gains ou pertes de change pouvant \u00eatre constat\u00e9s lors de cessions de biens immobiliers constituent une composante des plus ou moins-values brutes r\u00e9alis\u00e9es et sont pris en compte pour la d\u00e9termination des sommes imposables en application de l’article 150 U du code g\u00e9n\u00e9ral des imp\u00f4ts.” If sterling strengthened against the euro between your purchase and your sale, the currency gain increases your French taxable gain even though the pound-denominated profit looks smaller; if sterling fell, the currency loss reduces it. In the Lyon case the administration had converted the 1995 purchase price at the rounded 10 January 1995 rate of 1.24 euros to the pound, and the court approved it, while rejecting the taxpayer’s alternative rate. Use the official daily rate for each date, keep a printed record, and never net off later currency movements between payment of a deposit and completion.<\/p>\n Family history complicates the purchase price further. Many British sellers bought the UK house jointly with a former spouse and later bought out the ex-partner’s share with a balancing payment \u2014 the soulte \u2014 when the marriage ended. The Lyon seller argued exactly that: his 2003 buyout of his ex-wife’s rights for 100,000 pounds should increase his acquisition price. French law refused, through the effet d\u00e9claratif (declaratory effect) of matrimonial partitions. Article 150 U, paragraph IV<\/a> provides: “Le I ne s’applique pas aux partages qui portent sur des biens meubles ou immeubles d\u00e9pendant d’une succession ou d’une communaut\u00e9 conjugale et qui interviennent uniquement entre les membres originaires de l’indivision, leur conjoint, des ascendants, des descendants ou des ayants droit \u00e0 titre universel de l’un ou de plusieurs d’entre eux.” The court drew the full consequence: the partition is not treated as a transfer, the recipient is deemed to have owned the whole property since the community began, and the later sale’s acquisition price is the property’s value when it entered the community \u2014 the original 165,000 pounds \u2014 with no addition for the soulte paid to the ex-spouse. Check, therefore, whether your buyout fell under a French-recognised matrimonial partition or under English divorce law applied by an English court: the characterisation changes the acquisition price by tens of thousands of pounds, and you should have the divorce order, the transfer deed and the valuation evidence reviewed before filing rather than after a reassessment.<\/p>\n Once the gross gain in euros is fixed, French law applies holding-period relief (abattements pour dur\u00e9e de d\u00e9tention), then three layers of tax. The abatement extinguishes income tax after 22 years of ownership and social charges after 30 years; between those points, partial yearly percentages apply, and improvement costs and purchase expenses can be added to the acquisition price under fixed allowances. The resulting net gain bears income tax at 19%, social contributions on capital income<\/a> \u2014 “Les personnes physiques fiscalement domicili\u00e9es en France au sens de l’article 4 B du code g\u00e9n\u00e9ral des imp\u00f4ts sont assujetties \u00e0 une contribution sur les revenus du patrimoine assise sur le montant net retenu pour l’\u00e9tablissement de l’imp\u00f4t sur le revenu” \u2014 at the combined rate of 17.2%, and, for net gains above 50,000 euros, the surtax on high property gains of 2% to 6%. None of this is reduced by the fact that the United Kingdom already taxed the same gain; it is neutralised, instead, by the treaty credit. The administration confirms that a tax credit may then be deducted from the French tax. Article 24, paragraph 3(a) of the 2008 treaty provides that “nonobstant toute autre disposition de la pr\u00e9sente Convention, les revenus qui sont imposables ou ne sont imposables qu’au Royaume-Uni conform\u00e9ment aux dispositions de la pr\u00e9sente Convention sont pris en compte pour le calcul de l’imp\u00f4t fran\u00e7ais lorsqu’ils ne sont pas exempt\u00e9s de l’imp\u00f4t sur les soci\u00e9t\u00e9s en application de la l\u00e9gislation interne fran\u00e7aise.” You declare the worldwide income, France computes its tax, and then grants a credit equal to the French tax attributable to the UK gain \u2014 capped at the French tax, so any excess British tax is not refunded. The Conseil d’\u00c9tat clarified three points that protect you in an avis of 12 February 2020, No 435907<\/a> on this very treaty. First, the credit also covers the French social contributions, because they form part of the French tax defined by the treaty, and France cannot deny the credit on the ground that the United Kingdom levies no equivalent charge. Second, “Aucune des stipulations du (i) du a) du paragraphe 3 de l’article 24 de la convention ne permet de restreindre le b\u00e9n\u00e9fice du cr\u00e9dit d’imp\u00f4t \u00e9gal au montant de l’imp\u00f4t fran\u00e7ais aux seuls revenus relevant d’un bar\u00e8me progressif d’imposition.” Proportional taxes such as the 19% flat levy qualify too. Third, the condition of being subjected to United Kingdom tax means the income must fall within the base of a British tax listed in the treaty \u2014 “cette condition n’exige pas que les revenus en cause aient \u00e9t\u00e9 soumis \u00e0 une imposition effective.” Declare the gain to HMRC, even if British reliefs reduce the British bill to zero, and the French credit remains available. Conversely, gains that the United Kingdom exempts entirely from its tax base for reasons of personal status may fail the test \u2014 another reason to file the British return properly rather than ignoring it.<\/p>\n French filing for a foreign property sale surprises British sellers because there are two layers. The administration requires a special return to be filed within the month following the sale with the tax office of your domicile \u2014 form 2048-IMM for a building, or 2048-M for shares in a property-rich company. This one-month special return computes the French gain, the abatements, the 19% levy, the social charges and the surtax, and claims the treaty credit for the British tax. Then, the following spring, the gain and the credit must also appear on your annual income tax return: foreign income on the 2047 schedule and the overall return 2042 and its supplement 2042-C, since Article 170 of the General Tax Code<\/a> provides that “En vue de l’\u00e9tablissement de l’imp\u00f4t sur le revenu, toute personne imposable audit imp\u00f4t est tenue de souscrire et de faire parvenir \u00e0 l’administration une d\u00e9claration d\u00e9taill\u00e9e de ses revenus et b\u00e9n\u00e9fices, de ses charges de famille et des autres \u00e9l\u00e9ments n\u00e9cessaires au calcul de l’imp\u00f4t sur le revenu”. If you live in Paris or elsewhere in \u00cele-de-France, this section concerns you directly: file the 2048-IMM with the service des imp\u00f4ts des particuliers of your Paris arrondissement or suburban domicile, not with the non-residents office, and expect the Paris services to cross-check the declared euro gain against the pound prices using Banque de France rates. Practical Paris points include keeping a French-language summary of the English conveyancing documents, because the examining officer works from the French file; requesting a rescrit or at least a written position from your local service before filing where the soulte or the treaty credit is uncertain; and diarising both the British 60-day deadline and the French one-month deadline from completion, since missing either triggers interest, penalties and loss of credibility in any later dispute. The service-public.fr English page on property gains<\/a> gives a useful overview of the French framework for Anglophone readers, but the impots.gouv.fr foreign-property page quoted above governs your specific case.<\/p>\nB. Your London House Is Not Your French Main Home: the Exemption That Fails<\/h3>\n
II. France Calculates the Gain in Euros, Credits the British Tax and Polices the Return<\/h2>\n
A. Computing the Gain, Converting the Pounds and Crediting the UK Tax<\/h3>\n
B. Filing on Both Sides on Time and Challenging an Unfair Bill<\/h3>\n