Rebates for UK Owners
Originally posted on & updated on 14th March, 2025
Before Brexit, taxpayers living in the UK who were liable to the French social charge paid a reduced rate of 7.5% (usually 17.2%) on their French real estate income and capital gains. This arose under the EU Directive on the coordination of social security systems, which applies to tax residents outside of France, although it may also apply to French residents who are affiliated with the NHS.
Impact of Brexit on UK Taxpayers
Due to Brexit, the Directive no longer applies to UK residents from 1 January 2021. Consequently, French tax offices and advisers applied an increase of 17.2% to UK residents. Unsurprisingly, this triggered a strong backlash in the UK.
New Post-Brexit Agreement
On 30th December 2020, the EU and the UK announced the terms of the post-Brexit Trade and Cooperation Agreement, which included new rules on social security coordination between the EU and the UK.
Reversal by French Tax Authorities
In an unforeseen U-turn, French tax authorities decided that the rules in the Trade and Cooperation Agreement essentially mirrored the regulations in the EU Directive and, therefore, reverted to the reduced social charge rate of 7.5% for UK taxpayers. The French tax authorities published their administrative guidance on this last month to confirm these welcome changes,
Claiming Refunds for Excess Payments
UK taxpayers who received rental income from a French property or sold one in 2021 are now able to claim a tax refund for the additional social charges they unduly paid. Taxpayers who believe they are eligible to make a claim have until 31 December 2023 (or until 31 December 2024 in respect of rental income) to lodge a claim with the French tax authorities.
Please note this article is for general information. You should not rely on it without advice on the specific facts of your case.
Our UK based tax experts specialise in such French/UK issues; including taxation, wealth tax, succession, real estate etc. They have extensive knowledge of French tax, please contact us for more details, and if you are due a rebate, we may be able to help secure a very good rate of exchange when you transfer your euros back home.
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