Social Charges on Investments and Capital Gains Post-Brexit: 18.6% or 7.5%?

While many French tax liabilities depend upon whether you are tax resident in France or the UK, if you have income from French sources (for example, investment income), you will be liable to pay French taxes on this income. If you sell your second home in France, you will also be liable to pay French capital gains tax, even if you are a UK resident.

As well as submitting a French tax return and paying French income tax, you will also be liable to pay French social charges (social security contributions) on any investment income and capital gains. As the rates of social charges in France are much higher than income tax rates, this is generally the most significant payment to take into account.

French prélèvements sociaux on investments and capital gains are calculated based on three contributions. As of 1 January 2026, the CSG rate on capital and investment income increased by 1.4 percentage points, bringing the maximum combined total to 18.6%:

• CSG (Contribution sociale généralisée): 10.6% (increased from 9.2% on 1 January 2026)
• CRDS (Contribution pour le remboursement de la dette sociale): 0.5%
• Prélèvement de solidarité (Solidarity levy): 7.5%

This increase also affects the prélèvement forfaitaire unique (PFU), commonly known as the flat tax, which has risen from 30% to 31.4% (comprising 12.8% income tax and 18.6% prélèvements sociaux).

The same rates of social charges apply to both residents and non-residents. However, for non-residents who are affiliated with another EU or EEA social security system, there is an exemption from the CSG and CRDS. This means that eligible EU/EEA residents pay only the 7.5% prélèvement de solidarité on any investment income or capital gains. This exemption is unaffected by the 2026 rate increase, since it is the CSG (and CRDS) that it covers, and the prélèvement de solidarité has not changed.

Non-residents who are domiciled outside France but have French-source income such as rental income (revenus fonciers) or real estate capital gains (plus-values immobilières) are subject to prélèvements sociaux on that income, though certain exemptions are available.

Should Brits pay 18.6% or 7.5% social charges post-Brexit?

The big question when the UK left the EU was whether or not the CSG/CRDS exemption would still apply to British residents. From January 2021, Brits were no longer entitled to the exemption, leaving them liable to pay the full rate on any investment or capital gains income.

However, there was a question over the legality of this, and whether the Trade and Cooperation Agreement (TCA) between the EU and UK (signed in December 2020) protects the rights of UK residents from these additional social security liabilities.

In February 2022, the French tax authority published a revision of their guidance (Bulletin Officiel des Finances Publiques), confirming that UK residents can continue to benefit from the CSG/CRDS exemption. This exemption applies under the following conditions:

• You are a national or legal resident of the United Kingdom
• You are affiliated with the British social security scheme
• You are not covered by the French social security scheme

What does this mean in practice?

Provided that you are a legal UK resident, pay your social security contributions in the UK, and do not benefit from the French social security scheme, you will be subject to social charges of 7.5% only (the prélèvement de solidarité) on any investment income or capital gains in France.

Without the exemption, you would pay the full rate of 18.6% (for income arising from 1 January 2026 onwards; 17.2% for income arising before that date).

Note that the CSG increase from 9.2% to 10.6% applies specifically to capital and investment income. The CSG rates on pensions, salaries, and other replacement income are unchanged. If you are unsure about your situation, it is advisable to seek professional advice from a tax advisor experienced in Franco-British tax matters.