Brexit and social security contributions, the good news!

Following a long dispute at the CJEU, European residents were able to see their liability to social security contributions on income from assets in France reduced from 17.2% to 7.5% (only the “prélèvement de solidarité” of article 235 ter of the CGI remains applicable).

This exemption does not apply to non-EU countries, whose residents are still liable for social security contributions of 17.2%.

Yet, since BREXIT, from 1/1/2021, the United Kingdom is a non-EU state.

As a result, from 1 January 2021, UK residents are subject to a rate of 17.2% on capital gains on the sale of property in France (but also on income from assets “revenus du patrimoine” such as rental).

However, the tax authorities have now taken the position that the agreements on the exit of the United Kingdom from the European Union, signed on 12 November 2019 and 30 December 2020, should be interpreted as allowing UK residents to continue to benefit from the exemption.

The conditions to be met are

• to be affiliated to the British social security system ;
• be resident in the United Kingdom ;
• not be covered by the mandatory French social security system.

Subject to compliance with these conditions, a UK resident continues to benefit from the 7.5% rate on income from assets in France.

If social security contributions of 17.2% have already been paid in 2021 or 2022 (on real estate capital gains since 1/1/2021 in particular, and on 2020 income), it is possible to obtain a refund.

To do so, it is necessary to submit a claim to the tax administration within the legal time limits.

The RM Cabinet is, of course, at your disposal to assist you in this process.