You have found the house in the Dordogne, the Luberon or the Cotentin that you want your family to keep for decades. The estate agent now asks how you wish to buy: in your own names, through a société civile immobilière (SCI, the French family property company), or with a tontine survivorship clause in the deed. Each route changes who controls the house, what tax you pay while you hold it, what your children inherit, and what happens if the family falls out. Since Brexit, the purchase itself remains open to British buyers — France imposes no nationality condition on buying a home — but everything around the purchase has hardened: mortgages are tougher to obtain from London, stays beyond 90 days in any 180-day period need a visa, and the tax treaty does the heavy lifting where EU law once smoothed the edges. This guide compares the three holding structures head to head, works through the tax and succession mechanics that matter to a British family, and sets out what to do when the structure breaks down: a deadlocked SCI, a forced sale by a creditor, or a tax bill you believe is wrong.
I. How do an SCI, a tontine clause and direct ownership actually work for a British family buyer?
A. Should a British family buy its French house through an SCI, and what does running one really cost?
An SCI is a civil company whose only business is owning and managing property. The Civil Code defines the company contract in deliberately broad terms: “La société est instituée par deux ou plusieurs personnes qui conviennent par un contrat d’affecter à une entreprise commune des biens ou leur industrie en vue de partager le bénéfice ou de profiter de l’économie qui pourra en résulter.” In practice, two or more family members sign written statuts (articles of association), contribute cash or the purchase price, and receive parts sociales (shares) in return. The company, not the individuals, then buys the house from the seller before the notaire (the French public officer who authenticates conveyances, collects registration duties and files the deed with the land registry). The statute book confirms that these provisions apply across civil companies: “Les dispositions du présent chapitre sont applicables à toutes les sociétés civiles, à moins qu’il n’y soit dérogé par le statut légal particulier auquel certaines d’entre elles sont assujetties.”
For a British family, the SCI offers four concrete advantages. First, control can be separated from capital: parents who fund 90 per cent of the price can still give each child an equal vote, or keep the gérance (management) for themselves while the children hold bare shares. The manager is appointed under flexible rules: the company is managed by one or more persons, whether or not they are shareholders, appointed by the articles, by a separate deed or by a decision of the shareholders. Second, shares are easier to give away gradually than bricks and mortar: a parent can donate a few shares each year and use the renewable tax-free allowances, a technique examined in our companion guide on gifting a French house to your children. Third, the SCI avoids the fragility of bare co-ownership, because no shareholder can force a sale of the house itself the way a co-owner in indivision can force partition of the property, as explained below. Fourth, lenders in France know the vehicle well, and a French mortgage can be taken out in the name of the SCI with the shareholders standing surety.
Setting one up involves real formalities and real money. The statuts must be drafted with care — off-the-shelf templates regularly omit the approval clause for share transfers, the rules for calling meetings, and the procedure for valuing shares when a shareholder leaves, and each omission becomes a dispute later. The company must be registered with the registre du commerce et des sociétés (the companies register kept by the commercial court registry), which gives it legal personality; an unregistered civil company risks being treated as a mere société en participation (an undisclosed partnership without personality), with the property treated as directly co-owned and exposed to the personal creditors of each member. A legal announcement must be published, a registered office fixed, and a bank account opened in the company’s name — French banks will ask for the passports, proof of address and tax residence certificates of every British shareholder, and since Brexit some banks apply enhanced checks to non-resident shareholders, so allow several weeks. As a rough guide, budget around one to two thousand euros for the company formation in addition to the ordinary purchase costs, plus a few hundred euros a year for accounts and meetings; confirm the figures with your notaire and accountant before signing anything, because fee scales move.
The tax treatment follows the shareholders rather than the company, by default. Each shareholder declares his or her share of the rental result on a French income tax return, under the rules that tax transparent entities: shareholders are personally liable to income tax for the fraction of the company’s profits corresponding to their rights, and the Code details how that fraction is computed when the rights sit on the balance sheet of a company or a business taxed on real profits. An SCI that only holds the family’s holiday home and lets it out from time to time therefore produces little current tax if it produces little rent, but each letting must still be declared, and the impôt sur la fortune immobilière (IFI, the annual tax on real-estate wealth above the threshold) looks through the shares to the underlying bricks, as our guide on IFI for British owners explains. The shareholders may instead elect for corporation tax, which can suit a letting business that retains profits for further purchases, but the election changes the taxation of a later sale of the property or the shares, so it should be modelled with an adviser before the first euro of rent arrives.
One warning matters more than any other: an SCI protects the family against itself only if the statuts organise exits. Shares in a family SCI have no quoted price, and a shareholder who wants out can be trapped if the articles say nothing about valuation and buy-back. Insist on a valuation method — for example, net asset value assessed by an independent valuer — a timetable for payment of the price, and a clause allowing the company or the remaining shareholders to pre-empt the shares. Without these, the departing shareholder’s only weapon is the court-ordered dissolution described in Part II.
B. When does a tontine clause, bare indivision or a split of usufruit and bare ownership beat the SCI?
Buying directly in your own names places you in indivision, the French regime of undivided co-ownership: each buyer owns an abstract fraction of the whole house, and no one owns any particular room. The regime is deliberately unstable. The Code states the principle bluntly: “Nul ne peut être contraint à demeurer dans l’indivision et le partage peut toujours être provoqué, à moins qu’il n’y ait été sursis par jugement ou convention.” Any co-owner can force a sale at any time unless the others have agreed, in a written convention d’indivision (co-ownership agreement), to stay together for up to five years renewable — a possibility the Code expressly organises: “Ceux qui ont des droits à exercer sur des biens indivis, à titre de propriétaires, de nus-propriétaires ou d’usufruitiers peuvent passer des conventions relatives à l’exercice de ces droits.” For an unmarried British couple or friends buying together, that fragility is the decisive argument for an SCI instead: shares cannot be partitioned, only sold.
The pacte tontinier, or tontine clause, is inserted directly into the purchase deed and provides that the survivor of the buyers is deemed to have owned the whole house from day one, with the first to die deemed never to have owned it. For a couple without children in common — second marriages are the classic case — the clause keeps the survivor in the home and, on a first analysis, outside the succession of the deceased, which can neutralise the claims of the deceased’s children from a first marriage over that specific house. The mechanism has limits British buyers regularly underestimate. It works best when both buyers contribute equally and are of similar age; a large age gap turns the clause into a one-way bet that disappointed heirs will attack. It offers no protection against the couple’s joint creditors, it complicates any later borrowing or sale because both heads must agree while both are alive, and its interaction with an English will electing English law needs careful drafting with the notaire, since the tontine operates inside the French deed while the will operates under the elected national law. Ask the notaire to model three scenarios in writing — simultaneous survival, husband first, wife first — with the tax figures for each, before accepting the clause.
Démembrement, the split of ownership between usufruit (usufruct, the lifelong right to live in the property or take its rents) and nue-propriété (bare ownership, the right to recover full ownership when the usufruct ends), suits a different objective: parents who want to hand value to the children now while keeping the use of the house. The Code defines the usufruct simply: “L’usufruit est le droit de jouir des choses dont un autre a la propriété, comme le propriétaire lui-même, mais à la charge d’en conserver la substance.” Parents in their sixties who buy a house and immediately give the bare ownership to their children freeze the taxable value of the gift at the discounted bare-ownership value, and when the second parent dies the children consolidate full ownership with, in principle, no further transfer duty on the extinction of the usufruct. The trade-off is rigidity: selling or mortgaging the house afterwards requires the agreement of usufructuaries and bare owners together, and any family quarrel blocks the transaction. Families who value flexibility often prefer the SCI with a gift of shares, which achieves a similar gradual handover while leaving management in the hands of the parent-manager.
In short: choose the SCI when several people, especially across generations, must manage and transmit the house over time; consider the tontine when a couple without common children wants the survivor protected in the specific house; consider démembrement when parents want to lock in today’s value for their children while keeping the keys; and stay in bare indivision only for short, simple co-ownerships where everyone accepts that any party can force a sale. Whatever the vehicle, put the choice and its reasons in the file your notaire keeps — if the tax office or an heir challenges the arrangement years later, that contemporaneous record is your best evidence.
II. What tax and succession traps await British owners, and how do you fight back when the structure fails?
A. How are British owners taxed while they hold the house, and what happens to it when they die?
While you hold the house, three French taxes compete for your attention. The taxe foncière (the annual property tax billed to the owner) and the taxe d’habitation on second homes, now widely surcharged in high-demand areas, are billed in the autumn and follow the property regardless of the owner’s nationality; keep the avis (assessment notice) for every year, because any challenge starts from its dates. Rental income, whether earned directly or through a transparent SCI, is declared in France first if the property stands in France, with the France–United Kingdom double tax treaty of 19 June 2008 then allocating the right to tax and obliging the United Kingdom to relieve the French tax by credit; declare in both countries and never assume that tax paid in one exempts you from filing in the other. Capital gains on a later sale by a British resident of the United Kingdom fall under the levy mechanics for non-residents: gains realised by non-resident persons on the disposal of French real estate are subject to a levy under the stated rates, subject to international treaties, with the social charges rate depending on the seller’s health-cover position — the full mechanics are worked through in our guide to selling a French second home from Britain.
On death, France applies its own connecting factors before any treaty is considered. French succession duty is territorial in a way that surprises common lawyers: liability turns on where the deceased was domiciled, where the heir is domiciled, and where the assets sit, and a French house is always within the French net. Against that background the forced heirship reserve continues to shape every British estate plan touching France. The Code defines it as “La réserve héréditaire est la part des biens et droits successoraux dont la loi assure la dévolution libre de charges à certains héritiers dits réservataires, s’ils sont appelés à la succession et s’ils l’acceptent.” The fractions are fixed by statute: gifts by lifetime act or by will may not exceed one half of the estate where the deceased leaves one child, one third with two children, and one quarter with three or more. British buyers sometimes assume that an English will electing English law sweeps this away; the election, available under the EU Succession Regulation, governs which law designates the heirs, but the French notaire settling a French house still checks the reserve position with rigour, and our analysis of English wills and French forced heirship shows how the two layers interact in practice. The 1963 Franco-British estates treaty then prevents the same house being fully taxed twice, by credit or exemption mechanics that your notaire must claim expressly — treaty relief is never automatic.
Within the SCI, the succession mechanics run through the shares. Shares are movable property, so they pass under the law governing the succession as a whole, while the house itself stays put inside the company — which is precisely why the SCI simplifies multi-heir situations: instead of four children co-owning a roof, each inherits shares, and the surviving parent-manager keeps running the house. Two cautions follow. First, the value of the shares for duty purposes tracks the value of the underlying property, so stuffing a house into an SCI does not make its value disappear; minority discounts sometimes claimed on share valuations are routinely disputed by the tax office and should be supported by an independent valuation, not asserted. Second, gifts of shares to children during your lifetime consume the same renewable allowances as gifts of bricks, and the notaire will require the company’s accounts and an up-to-date valuation at the date of the gift — keep the SCI’s books clean every year so the file is ready.
Practical compliance keeps the whole edifice standing. File the French returns even in loss-making years, answer demandes de renseignements (requests for information) within the stated deadline, and calendar the prescription periods: an assessment notified late, or computed on a manifestly wrong base such as the wrong cadastral rental value, can be challenged by réclamation (the administrative claim filed with the tax office) within the statutory time limit running from the assessment. Pay first where payment suspends enforcement only if you ask for it — a claim alone does not stop recovery — and request a sursis de paiement (stay of payment) expressly while the claim is examined.
B. What can you do about a deadlocked SCI, a creditor chasing the house, or a refusal you consider unlawful?
Family companies deadlock. Two brothers who each hold half the shares stop speaking, the manager calls meetings the other boycotts, the bank account needs two signatures that will never meet on the same page, and the roof still needs repairing. The Civil Code provides the emergency exit: “La société prend fin : (…) 5° Par la dissolution anticipée prononcée par le tribunal à la demande d’un associé pour justes motifs, notamment en cas d’inexécution de ses obligations par un associé, ou de mésentente entre associés paralysant le fonctionnement de la société (…)” The courts apply this text to family SCIs without hesitation. In a widely cited ruling, the Commercial Chamber of the Court of Cassation reviewed a dissolution claim brought by a 50 per cent shareholder of an SCI, examining the case through “Vu les articles 1382, 1836 et 1844-7,5° du code civil” (Cass. com., 10 July 2012, No 11-14.267, SCI Le Chaudron des étoiles), and the Third Civil Chamber later upheld a dissolution where the findings showed that “la mésentente entre les associés rendait impossible le fonctionnement de la SCI” (Cass. 3rd civ., 4 April 2019, No 18-10.966, SCI Résideo). Before petitioning, document the paralysis: unanswered registered letters convening meetings, refused signatures, blocked payments, and a bailiff’s report if access to the property or the books is denied. Ask the court in the alternative for a administrateur provisoire (provisional administrator) to keep the company running — paying the insurance, the taxe foncière and the caretaker — while the dissolution or buy-out is decided, because judges favour shareholders who protect the asset over those who let it rot to strengthen their case.
Creditors form the second front. A creditor with an unsatisfied judgment against one shareholder or co-owner can move against that person’s interest in the house, and French law gives the creditor procedural tools to step into the debtor’s shoes. The Court of Cassation has confirmed, in an SCI context, that where the creditor holds an established claim, shows fruitless enforcement attempts and the debtor’s inertia, the oblique action is admissible — the ruling records precisely that the creditor, holder of a claim confirmed by a final judgment, demonstrated unsuccessful recovery attempts and the inertia of his debtor, and the court of appeal, which held the oblique action admissible, legally justified its decision in substance (Cass. 3rd civ., 4 May 2016, No 14-28.243, SCI Le Vallon-Magenta). The lesson for British families is organisational: keep the SCI registered and in good standing, keep personal debts and company assets strictly separate, never mix bank accounts, and insure the property continuously. A creditor who finds a properly run company faces a long procedure against shares of uncertain marketability; a creditor who finds an unregistered vehicle, mixed accounts and unpaid premiums finds the house itself.
Administrative refusals form the third front, and Brexit multiplied them: residence permits for accompanying family members, registration of a British company as shareholder, access to professional letting registration schemes that demand national identity numbers in rigid formats, or a bank’s refusal to open the SCI’s account. Each refusal must be answered on its own procedural track. Demand every refusal in writing with its legal basis and the time limit and forum for appeal — French administration must state the remedies, and an unmotivated refusal is already vulnerable. File the recours gracieux (informal appeal to the authority itself) or recours hiérarchique (appeal to its superior) within two months where the track applies, while preparing the recours contentieux (court claim) before the tribunal administratif (administrative court) or the tribunal judiciaire (civil court) according to the subject matter. For bank-account refusals specifically, the droit au compte procedure before the Banque de France designates a bank obliged to open the account, a route our guide on forcing a bank to open your account walks through step by step.
Paris and the Île-de-France add a final layer of practical detail for British buyers settling in the capital region rather than buying a rural second home. The competent courts are the Paris judicial and administrative courts, delays for hearings run longer than in most provincial cities so interim relief should be requested early, and the file your lawyer assembles — title deed, SCI statuts and Kbis extract, tax assessments, correspondence showing the deadlock or the refusal — should be complete before the first appointment, because Paris registries reject incomplete filings without examining the merits. Properties in the capital also magnify every tax figure in this article, which makes the choice between SCI, tontine and démembrement proportionately more valuable to get right at the outset.
Conclusion
A British family buying a French house after Brexit chooses an owner before choosing a house in the legal sense: the SCI for collective management and gradual transmission across generations, the tontine clause for a couple who want the survivor kept in the specific home, démembrement for parents who want to pass value now while keeping the use, and bare indivision only for brief, simple co-ownerships. Each vehicle carries its own tax logic — transparency or corporation tax for the SCI, territorial property taxes for everyone, succession duty with the reserve and the treaty overlay — and each fails in a characteristic way that the law anticipates, from court-ordered dissolution for deadlock to partition at the request of any co-owner. Put the chosen structure in writing with its reasons, keep the company’s books and the property’s tax file immaculate, and when a deadlock, a creditor or an administration moves against the house, answer within the time limits with the documents this guide lists. Decided early and run properly, the structure you sign before the notaire will still be protecting your family when the children inherit the keys.
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