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.

11.4.1. Shares

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

Since January 2018 a single rate tax, called the Prélèvement Forfaitaire Unique – PFU, applies on the sale of shares.

The tax is actually made made up of two components:

• Income tax at the rate of 12.8%
• Social charges at the rate of 17.2%

The latter rate is the result of the general increase that has occurred in the social charge CSG of 1.7%, increasing the total level of social charges on investment and rental income and capital gains from 15.5% to 17.2%.

It ends the tax allowance for duration of ownership (relief at the rate of 50% or 65%) that was available under the previous tax regime on the sale of shares. Only shares purchased prior to 2018 can continue to benefit from this relief and be taxed according to income tax scale rates.

However, it remains possible to opt to be taxed using income tax scale rates for shares purchased since 2018, but without any allowance for duration of ownership. The social charges continue to apply.

If you take this option it applies to all your investment income; you cannot pick and choose which income to be taxed using the PFU and which income should be taxed using the income tax bands and rates.

Special provision remains up to 2022 for retiring owners of a company who are granted relief of €500,000 on the sale of their shares, subject to conditions.

If you are not resident in France then the rules will depend on the terms of any double taxation treaty with your home country. Normally you are exempt from capital gains tax in France on the sale of shares.

11.4.2. Personal Property

There is no capital gains tax payable on the sale of household furniture or your car, provided in the latter case it is not a vintage car classified as a 'voiture de collection'.

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 11% (2018) without allowances.

The same applies to classic cars, provided sale value greater than €5,000.

You can also elect to choose the standard form of capital gains tax if you so wish, against which you can offset eligible costs, and obtain the standard allowance for duration of ownership, although proof of purchase is required.

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