11. French Capital Gains Tax

1. Scope of the Tax
2. Exemptions on Sale of Property
3. Allowable Costs on Sale of Property
4. Shares and Personal Possessions
5. Taxation of Building Land
6. Fiscal Representative for Non-Residents

11.4. Capital Gains on Shares and Personal Property

Capital gains tax on shares and personal property is called plus values mobilières.

i. Shares

If you are resident in France you are liable to French taxation on the sale of shares in whichever country they are held.

Until 2013 shares were liable for capital gains tax, in a very similar manner as occurred for real estate.

However, since 2013 capital gains made on the sale of shares in France have been taxed as part of the personal income tax system, on a progressive basis according to the marginal rate of tax that applies to your household.

Tax relief is granted for the number of years the shares have been held.

Tax relief is granted on the gain for the number of years the shares have been held at the rate of:

50% for shares held between 2 years and less than 8 years;
65% if held at least 8 years. 

There is no relief for duration of ownership granted against the social charges (prélèvements sociaux), which are charged at the rate of 15.5%.

In addition, the social charges of 15.5% are payable and deducted at source, although 5.1% is deductible against income tax.

Shares held and sold under 2 years attract no relief.

There are particular provisions governing the sale of shares relating to smaller companies created within the last 10 years, and which are based within the EEA.

There are also particular, more generous, provisions concerning 'business angels' and sales of shares by business owners, as well as shares sold within a family, that are not covered here.

If you are not resident in France then the rules will depend on the terms of any double taxation treaty with your home country.

If you are non-resident, then normally you are exempt from capital gains tax in France on the sale of shares.

ii. Personal Property

There is no capital gains tax payable on the sale of household furniture or your car.

In relation to capital gains on personal property (biens meubles) other than real estate, such as horses, boats and wine (!) the general rule since 1st January 2014 is that there is 5% relief for each year owned over 2 years, granting complete relief if held for 22 years.

There is no tax on such gains if the sale proceeds are under €5,000.

Special rules apply in relation to the sale of jewellery or precious objects, where a standard tax charge is applied, whether or not a capital gain was realised. Jewellery and works of art or antiques are charged a flat rate of 6% without allowances. You can also elect to choose the standard form of capital gains tax if you so wish, against which you can offset eligible costs, although proof of purchase is required.

Next: Capital Gains on Sale of Building Land

Back: Allowable Costs on Sale of Property