Did you know that the rules for buying French property are being relaxed? There have always been advantages in being non-resident in France because the impact of tax residence is fundamental to income tax, wealth tax and inheritance tax so this relaxation is very positive for high value prestigious French property.
One way of avoiding the effects of French forced heir ship or succession law is to set up a company for the purpose of buying the property. The shares of an offshore company owning a French property can be transferred easily without involving a French Notary. If the beneficial owner continues to be French non-resident then the company shares are outside the French inheritance tax net.
The 3% French annual market value tax has been one of the main articles used to attack offshore trusts and companies owning properties in France. Accordingly, Guernsey, Jersey and Isle of Man companies have not been attractive for investment into France.
All this looks set to change with an agreement signed recently between Guernsey and France whereby the 3% tax can be exempted by disclosing the names of shareholders owning more than 1%. This should be positive for French property, especially investment property, as a big pool of capital, including that of offshore funds, will now be able to invest in France for the first time.
The new arrangements should come into effect on 1st January 2010
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