Following the United Kingdom’s withdrawal from the European Union on January 1, 2021, British nationals receiving French-sourced investment income (such as rental income, capital gains on real estate or securities, and investment income) are no longer subject solely to the 7.5% solidarity levy, but are now liable for the full rate of social contributions, totaling 17.2%.
Unexpectedly, the French tax authorities recently confirmed—through an update to their Brexit FAQ—that the solidarity levy remains applicable to French-sourced investment income received as of January 1, 2021, provided that the following three conditions are met:
- Being affiliated with the UK social security system,
- Being a national or tax resident of France, the United Kingdom, or another European Union member state,
- Not being subject to a mandatory French social security scheme.
This announcement is all the more welcome given its retroactive effect. British nationals or French tax residents affiliated with the UK social security system may now submit a claim to obtain a refund of social contributions unduly paid, for example following the sale of real estate located in France. Such claims can be filed until December 31, 2023, for sales completed in 2021. ⚠️ Please note: UK residents must appoint an accredited tax representative when selling property in France.
