Good morning
An individual sold a property in France in 2013-14, with a gain subject to CGT.
According to the infos I have (period of availability and actual let), it qualified for FHL until 2011-12 but didn't qualify in 2012-13 and 2013-14 (however it met the availability threshold and there was a genuine intention to let).
It is not clear yet whether the previous accountant ever filed as FHL until 2011-12. All I have is the last tax return where income was declared as foreign rental income, and no election was made.
Assuming it had been declared as FHL previously, I believe I would still have time to make an election for last year's tax return for a period of grace, which would cover 2012-13 and 2013-14 - and amend last year's return. The property would then qualify for ER.
Could someone confirm this, and advice on how to make this late election?
Thank you.
Replies (9)
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Seek and ye shall find
The answers you are looking for (sorry to sound a bit like Yoda there) are in HMRC Helpsheet 253 - see period of grace
https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil...
Hope this helps.
Regards
John
I think your right
Hi,
Yes when I read the guidance it is clear that the property has to have qualified as an FHL in the year before the first election. If the tax year is closed in which it could have first qualified then I can't see a way back.
Regards
John
Another way of looking at it?
If the activity qualified as a FHL up to 5 April 2012 (irrespective of whether the (deemed) FHL trade was correctly declared as such) but cannot qualify after that date because the FHL qualifying conditions were not met, would it not be open to you to claim that the FHL trade ceased on 5 April 2012 and that the gain qualifies for ER since the disposal of the property has taken place within three years of that cessation?
No not "minimal" as Chipette suggests...
Taper relief for say 10 years is only 30%, then there is 19% normal CGT and potentially a CGT surcharge depending upon the amount of the gain - the CGT surcharge ranges from 2% to 6%. Currently CSG/CRDS of 15.5% is also being retained on property gains although the European Courts have said it is not appropriate to charge these Prélevements Sociaux to non-residents, nevertheless, the French notaires still do just that in order to protect their position as the French Govt is fighting this ruling!