Owning a Holiday Home in France: UK Tax Rules 2026/27
A holiday home in France creates UK tax obligations even though it never generates UK-sourced income — from declaring rental income on Self Assessment to double taxation relief and eventual UK Capital Gains Tax and Inheritance Tax exposure. Here is how it works in 2026/27.
The core principle: UK residents are taxed on worldwide income and gains
Owning property outside the UK does not remove it from the UK tax net if you are UK tax resident. Rental income, and any eventual capital gain on sale, both need reporting to HMRC, with double taxation relief preventing the same income or gain being fully taxed twice.
Capital Gains Tax Calculator
Calculate Capital Gains Tax on property, shares and other assets for 2025/26.
Open Capital Gains Tax calculatorWorked example: rental income and double taxation relief
Sarah lets her Dordogne holiday cottage for £9,000 a year (converted to sterling), and pays €1,800 (roughly £1,540) of French tax on that income.
| Step | Amount |
|---|---|
| Gross rental income (converted to GBP) | £9,000 |
| Allowable expenses | £2,000 |
| Net rental profit | £7,000 |
| UK Income Tax due on £7,000 (at Sarah's marginal rate, before relief) | £1,400 (20% basic rate example) |
| French tax already paid (credit available) | £1,540 |
| UK tax actually payable after double taxation relief | £0 (French tax paid exceeds UK liability in this simplified example) |
The credit is capped at the UK tax that would otherwise be due on the same income — it cannot create a UK tax refund, only reduce the UK liability to nil on that income.
Worked example: selling the property
James bought his French apartment for £180,000 (converted at the time) and sells it years later for £260,000, realising an £80,000 sterling gain after allowable costs.
Inheritance Tax Calculator
Estimate Inheritance Tax liability on an estate with our UK IHT calculator.
Open Inheritance Tax calculator| Step | Amount |
|---|---|
| Gain (sterling) | £80,000 |
| Annual exemption | £3,000 |
| Taxable gain | £77,000 |
| UK CGT at 24% (higher rate) | £18,480 |
| French capital gains tax and social charges already paid | Credited against the UK liability, up to the UK amount due |
Inheritance and forced heirship
French succession law has historically reserved a portion of an estate for children, regardless of what a will says — a materially different starting point from English law's freedom of testation. The EU Succession Regulation (Brussels IV) allows a UK national to elect for the law of their nationality to govern their French estate instead, but this needs to be explicitly stated in a valid will, which is why owning French property typically calls for coordinated advice from both a UK solicitor and a French notaire, rather than relying on a UK-only will.
Frequently asked questions
Do I have to declare rental income from my French holiday home to HMRC?
Yes — as a UK tax resident, you are taxed on your worldwide income, which includes any rental income from letting out a French property, regardless of whether the money stays in a French bank account. You must declare it on the foreign income pages of your UK Self Assessment return, converting the figures to sterling using an appropriate exchange rate.
Will I be taxed twice on the same rental income, once in France and once in the UK?
Not on the full amount, thanks to the UK-France double taxation treaty. France will generally tax the rental income first (as the property's location is there), and the UK then gives credit for French tax already paid against the equivalent UK Income Tax due on the same income, so you are not doubly taxed on the same income, though you may still owe the difference if UK tax on the income would be higher than the French tax already paid.
Do I owe UK Capital Gains Tax if I sell my French holiday home?
Yes, potentially — as a UK resident, gains on overseas property are within the scope of UK CGT, subject to the £3,000 annual exemption and the residential property rates (18%/24% depending on your tax band). France will typically also charge its own capital gains tax (plus social charges) on the sale, and double taxation relief allows you to offset French tax paid against the UK CGT liability on the same gain.
Does my French property count for UK Inheritance Tax?
Yes — if you are UK-domiciled (which most long-term UK residents are, regardless of nationality), your worldwide estate, including a French property, falls within the scope of UK Inheritance Tax on death. France also has its own succession and inheritance rules (including forced heirship rules that can restrict who you can leave French property to), so both UK IHT and French succession law and tax need considering together, ideally with advice from advisers in both countries.
What is French forced heirship and how does it affect my will?
French succession law traditionally reserves a fixed proportion of an estate for children (forced heirship), which can override a UK will's instructions for French assets unless specific EU succession regulations (Brussels IV) are correctly invoked to apply the law of your habitual residence instead. Getting this wrong can mean a French property passes differently to how your UK will intends, so specialist advice on structuring ownership and the applicable succession election is important.
Do I pay French property taxes even if I never rent the property out?
Yes — France levies an annual property tax (taxe foncière) on owners regardless of whether the property is let, and historically also charged a residence tax (taxe d'habitation) on second homes even after it was phased out for many main residences, so budgeting for ongoing French local taxes is necessary whether or not the property produces any income.
Does owning a French holiday home affect my UK residency status?
Simply owning an overseas property does not itself make you non-UK resident — UK tax residence is determined by the Statutory Residence Test, based mainly on the number of days spent in the UK and various connecting factors, not by property ownership abroad. However, time spent at the French property does count towards the days used in that test, so frequent long stays could be relevant to your overall residence position.
How do currency exchange rate movements affect the UK tax calculation?
Both rental income and any capital gain on sale must be converted into sterling using an appropriate exchange rate (generally the rate on the date of the transaction or an average rate for the period, as HMRC guidance specifies) for UK tax purposes, meaning currency movements between euro and sterling can increase or decrease your reported UK gain or income compared with the equivalent euro figures, independent of any real change in the property's value.
Try the calculators
Related reading
CGT Property Calculator: Selling a Second Home or Rental Property 2026/27
Selling a second home or buy-to-let in 2026/27 means Capital Gains Tax at 18% or 24% on the gain above your £3,000 annual exemption, reported and paid within 60 days of completion. Full worked examples.
Garden Rooms, Permitted Development and Tax 2026/27
A garden room or home office pod built under permitted development usually needs no planning permission, but the tax treatment differs sharply depending on whether you use it for a business, rent it out, or add it to a rental property. Here is how it works in 2026/27.
Non-Resident Landlord Rental Income: UK Tax Rules 2026/27
If you move abroad but keep a UK rental property, you remain liable for UK tax on the rent, and your letting agent or tenant may have to deduct basic-rate tax at source unless you register under the Non-Resident Landlord Scheme. Here is how it works in 2026/27.