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When you buy a leaseback it is very unlikely you
will pay any income tax at all.
income
tax
Due to the way in in which a leaseback property is
'written down' and the allowances involved, it is
unlikely that you will need to pay any income tax
on your investment. If you own multiple
investments things may change, but it is very
unusual to pay income tax on a leaseback.
inheritance
tax
This is an
area to pay attention to as the laws in France are
very different. Tax is payable on gifts or
inheritance of worldwide assets. However, for the
purposes of inheritance tax only, tax is
calculated on the net value of the asset, after
deduction of liabilities.
The rate of
tax depends on a number of factors: principally,
the recipient's relationship to the donor needs to
be established to determine the recipient's
personal allowance.
A spouse's
personal allowance is currently €76,000.
This is reduced to €46,000 for parents and
children. The balance in excess of the
allowance is taxed at progressive rates from 5% up
to a maximum of 40%.
For more remote family members and others, smaller
allowances are given and higher rates of tax will
apply.
capital
gains tax
You start
out with a standard liability of 16%. After 5
years however this starts to reduce at a rate of
10% per annum. This means that 15 years after
buying it, you would have NO capital gains to
pay.
UK
- France tax treaty
The most important relief from inheritance tax are
the international tax treaties that provide relief
from double taxation. There are some other limited
exemptions from inheritance tax but these
exemptions are subject to a specific conditions
being satisfied.
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