News article
French property owned through an SCI: no benefits in kind
taxation in the UK
Gordon Brown, the British chancellor, has at last provided clarification of what was a worrying issue for some UK tax residents who own or wish to purchase French property through an SCI (French property holding company). The concern was liability to benefits in kind tax in the UK on the basis of their ownership of that property. In the budget for 2007 it was announced that legislation in the Finance Bill 2008 is to be brought forward in order to remove the tax charge subject to meeting certain conditions.
The legislative change will apply to an overseas property owned by a company which is in turn owned by individuals. The sole activity of that company is holding the property for occupation and/or letting. The measure is to have retrospective effect.
Her Majesty’s Revenue and Customs has confirmed that it will not seek to levy this tax in the period intervening between the budget and the legislation subject to the following conditions:
a. The property is owned by a company owned by individuals or
b. The company’s only activities are ones that are incidental to its ownership of the property or
c. The property is the company’s only or main asset or
d. The property is not funded directly or indirectly by a connected company.
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Date
28th March 2007
Area in question
France
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