You are British, you own a house in France — a stone farmhouse in the Dordogne, a flat in Paris, a villa near Antibes — and well-meaning friends at the golf club keep telling you to put it into a SCI. The three letters stand for société civile immobilière, a French non-trading property company: a private company whose only business is owning and managing buildings. For a British family after Brexit, the promise is seductive. Instead of the children inheriting bricks jointly and falling into indivision — the joint ownership that arises between heirs, where every decision needs everyone — they inherit parts sociales, company shares, which can be divided, gifted gradually and voted. The surviving parent keeps control through the manager’s chair, the gérant, and the firm’s rulebook, the statuts, decides who may enter and who must stay out. That is the theory, and it works beautifully when the paperwork anticipates death, tax and family quarrels. It fails expensively when it does not: shares blocked by an approval clause, a widowed step-parent with no vote, a 3 percent annual tax bill nobody mentioned, and two countries taxing the same death. This guide explains the vehicle as a British owner needs it — how a family SCI works, what it costs every year, who gets the shares when a shareholder dies, and how to challenge the refusal, the break-up attempt or the double bill when things go wrong. Our general guide to the vehicle remains the starting point for the mechanics: The SCI for Foreign Buyers in France: Structure, Protections, and Legal Traps Every Investor Must Know.

I. Holding your French home in a family SCI after Brexit: how it works and what it costs

A. Should a British family put its French house into a SCI, and how do you set one up?

A SCI is a contract before it is a company. Article 1832 of the Civil Code (Code civil) defines it in one sentence: “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.” — see article 1832 of the Civil Code on Légifrance. Two or more people agree to put property into a shared enterprise. For a British couple, that usually means both spouses, sometimes with children or a parent, signing statuts before a notaire — the French public officer who authenticates property transfers and settles successions — contributing the house or the cash that buys it, receiving parts sociales in proportion, appointing a gérant to run the firm, and registering it. The official service-public page summarises the appeal for families exactly: the SCI organises matters more freely on the death of a shareholder and, crucially, stops the heirs finding themselves locked in indivision over the building, because a departing shareholder sells shares rather than forcing everyone to sell the roof — see Société civile immobilière: ce qu’il faut savoir on service-public.fr. Where three siblings inherit a farmhouse directly, any one of them can paralyse maintenance, letting and sale; where they inherit blocks of shares, the statuts decide majorities, the gérant keeps the lights on, and the reluctant sibling can sell shares without auctioning the house.

The second attraction is gradual transmission. Parents can gift shares to children little by little while keeping management, and each gift uses the French gift allowances: EUR 100,000 per parent per child, EUR 31,865 per grandparent per grandchild, renewable on a rolling basis. The service-public page confirms the mechanism and adds a valuation point that matters enormously: the shares are worth the property minus the company’s debts, so a house still carrying a mortgage transmits at a discount to its headline price — see Société civile immobilière: ce qu’il faut savoir on service-public.fr. Our companion guide on lifetime gifts works through the allowances, the fifteen-year clock and the declaration forms in detail: British Gift of a French House to Children: Donation Allowance, the 15-Year Clock and How to Challenge the Bill. One warning the official page states bluntly: shareholders in a SCI cannot claim the Dutreil 75 percent exemption on transmitted business assets, because that scheme is closed to companies whose object is managing movable or immovable wealth. A family SCI is an estate-planning tool, not a business, and the tax system treats it accordingly.

The third attraction is control through the rulebook. By default, every shareholder votes: “Tout associé a le droit de participer aux décisions collectives.” And when shares end up shared — divorced parents holding one block jointly, siblings inheriting together — the Code provides that “Les copropriétaires d’une part sociale indivise sont représentés par un mandataire unique, choisi parmi les indivisaires ou en dehors d’eux. En cas de désaccord, le mandataire sera désigné en justice à la demande du plus diligent.” Both passages come from article 1844 of the Civil Code on Légifrance. Read them as a warning as much as a comfort: the shareholders who draft bespoke statuts — qualified majorities for sale, appointment of the survivor as gérant, approval clauses for newcomers — buy peace; the family that signs a template inherits the default rules and the courtroom that enforces them. For British spouses, coordination with the matrimonial regime is essential, because the regime decides who owns what goes into the company: our guide on English marriages in France explains which regime owns the house and what happens on divorce or death at Married in England, Living in France: Which Matrimonial Regime Owns Your House.

Two British-specific cautions before you sign. First, a SCI is normally tax-transparent: it pays no tax itself, and each shareholder is taxed personally on their slice. Article 8 of the Tax Code (Code général des impôts) provides that members of civil companies which have not elected for corporation tax are personally liable to income tax on the share of profits matching their rights — including, in terms worth memorising for later, the rule that “En cas de démembrement de la propriété de tout ou partie des parts sociales, l’usufruitier est soumis à l’impôt sur le revenu pour la quote-part correspondant aux droits dans les bénéfices que lui confère sa qualité d’usufruitier.” — see article 8 of the Tax Code on Légifrance. The usufruitier, the holder of the life interest who enjoys the property, pays the income tax; the nu-propriétaire, the bare owner who will take full ownership later, does not. Article 1655 ter confirms the same transparency for companies whose sole object is acquiring, dividing or managing buildings attributed to shareholders: “les associés ou actionnaires sont personnellement soumis à l’impôt sur le revenu ou à l’impôt sur les sociétés, suivant le cas, pour la part des revenus sociaux correspondant à leurs droits dans la société.” — see article 1655 ter of the Tax Code on Légifrance. Electing for corporation tax (impôt sur les sociétés) is possible and sometimes useful for letting strategies, but it converts future capital gains treatment and complicates the parents’ exit, so the family holding its own home almost always stays transparent — and every British shareholder must therefore understand they are personally taxable in France on French rents even if the money never leaves the SCI bank account.

Second, the British side of the Channel does not disappear. A British shareholder who remains UK tax resident pays UK tax on worldwide income, SCI rents included: the British guidance states plainly that residents normally pay UK tax on all their income, whether from Britain or from abroad, — see Tax on foreign income: UK residence on GOV.UK — while someone non-resident pays UK tax only on UK income, not on foreign income. The 2008 France-United Kingdom double tax treaty then allocates the taxing right over French land income to France and obliges Britain to eliminate the double charge, but the British shareholder must still declare the income at home and claim the relief. Families where one spouse lives in France and the other in London, or where children-shareholders study in Britain, should map residence person by person before assuming the SCI income is already taxed in France so London will not ask. London asks; the treaty answers; the paperwork in between is yours.

B. What tax does a British family pay each year on a French SCI?

Start with the rent. A transparent family SCI that lets a flat in Nice or a gîte in the Lot declares the rental profit in France, and each shareholder — British or French, resident or not — answers for income tax on their fraction. Losses work the same way: a deficit can, within limits, reduce the shareholder’s other French property income. Where the family occupies the house themselves and lets nothing, there is no rental profit to tax, but the holding is not tax-free: the wealth tax and the annual 3 percent levy described below apply to enjoyment as much as to yield. And the administration expects annual accounts, a meeting, filed minutes and, for letting SCIs, the yearly Nº 2072 return. The SCI that never meets, never minutes and never files is the file the inspector opens first.

Next, the wealth tax. France taxes large property fortunes through the impôt sur la fortune immobilière, the IFI: “Il est institué un impôt annuel sur les actifs immobiliers désigné sous le nom d’impôt sur la fortune immobilière.” — see article 964 of the Tax Code on Légifrance. The threshold is EUR 1,300,000 of net property assets on 1 January, and SCI shares count expressly: the base includes “Des parts ou actions des sociétés et organismes établis en France ou hors de France appartenant aux personnes mentionnées au 1° du présent article, à hauteur de la fraction de leur valeur représentative de biens ou droits immobiliers détenus directement ou indirectement par la société ou l’organisme.” — see article 965 of the Tax Code on Légifrance. A British family tax-resident in France counts worldwide property toward the threshold; a British non-resident counts only French property, but the French house inside the SCI counts in full through the shares. Mortgages taken out to buy, build or repair the property reduce the net base within detailed conditions, which is why the financing structure chosen at purchase still matters years later. Families approaching the threshold should value the house honestly each January, deduct qualifying loans, and file — the IFI return follows the income return in May or June, and the penalties for silence mirror those for hidden income.

Then the levy most British families have never heard of: the annual 3 percent tax on the market value of French buildings held through legal entities, the taxe sur la valeur vénale, TVVI. Article 990 D casts the net deliberately wide: “Les entités juridiques : personnes morales, organismes, fiducies ou institutions comparables qui, directement ou par entité interposée, possèdent un ou plusieurs immeubles situés en France ou sont titulaires de droits réels portant sur ces biens sont redevables d’une taxe annuelle égale à 3 % de la valeur vénale de ces immeubles ou droits.” — see article 990 D of the Tax Code on Légifrance. Three percent of market value every year is confiscatory by design: it is a disclosure machine, not a revenue machine. The Cour de cassation confirmed the logic bluntly in a 2024 ruling on a Liechtenstein foundation: “toute entité est redevable de la taxe de 3 % sur la valeur vénale des immeubles qu’elle possède en France, sauf à justifier relever d’un des cas énumérés par le dernier.” — see Commercial Chamber, 10 May 2024, appeal No 21-11.230 on Légifrance. Everyone pays unless they prove an exemption, and the same ruling tightens the proof: “Seuls peuvent être assimilés aux actionnaires, associés ou autres membres qui détiennent, à quelque titre que ce soit, plus de 1 % des actions, parts ou autres droits les bénéficiaires économiques réels au 1er janvier de l’année d’imposition des entités juridiques concernées, et non des bénéficiaires éventuels.” Possible future beneficiaries do not count; only the real economic owners on 1 January open the exemption door.

For a classic British family SCI — French-registered, shareholders identified, house declared — the door is open. Article 990 E exempts entities seated in France, in an EU Member State, or in a country that has concluded an administrative-assistance treaty against fraud with France, provided they declare each year, no later than 15 May, the position, composition and value of the buildings held on 1 January plus the identity, address and holdings of every member holding more than 1 percent — see article 990 E of the Tax Code on Légifrance. The tax administration’s own page repeats the essentials: the tax equals 3 percent of market value of property held on 1 January, with several exemption routes, and entities in treaty States obtain the proportional exemption by filing form Nº 2746 spontaneously each year by 15 May — see Taxe sur la valeur vénale on impots.gouv.fr. Note what the exemption list says and what Brexit changed: a SCI seated in France is exempt on declaration regardless of its shareholders’ nationality, so British members of a French SCI are safe if the form is filed; but a structure seated in Britain holding the French house through a chain now depends on the Franco-British treaty network for the exemption, and loses it entirely if disclosure lapses. The practical rule is simple: a French SCI files its disclosure every spring without fail — the Nº 2072 income return, the Nº 2746 declaration where the chain requires it, both before 15 May — and diaries the deadline like a court date, because a missed year converts a paperwork duty into 3 percent of the house.

II. Passing on the SCI shares when a British shareholder dies: who inherits and how to challenge

A. Who inherits the SCI shares when a British parent dies, and is the surviving spouse protected?

Shares do not inherit themselves; two different laws decide. The succession law — French law, or English law if validly chosen — says who takes the shares. The company’s statuts say whether the takers may enter the company. Confuse the two and the family discovers at the worst moment that inheriting is not the same as belonging.

On the company side, the default rule is closure. Article 1861 of the Civil Code provides: “Les parts sociales ne peuvent être cédées qu’avec l’agrément de tous les associés.” — see article 1861 of the Civil Code on Légifrance. No transfer without the approval, the agrément, of all shareholders. The same article lets the statuts soften the rule — a defined majority instead of unanimity, approval by the gérant — and adds that “Ils peuvent aussi dispenser d’agrément les cessions consenties à des associés ou au conjoint de l’un d’eux.”, so transfers to existing shareholders or to a spouse can be freed from approval entirely. The service-public page mirrors the statute for practitioners: a transfer of SCI shares requires the approval of the shareholders together with registration at the tax office. — see Société civile immobilière: ce qu’il faut savoir on service-public.fr. Death is a transfer. Unless the statuts continue the company with the heirs — the clause families call continuation — the heir who receives shares by will may find the surviving shareholders voting to keep the stranger out, with the price of the shares as the consolation. British parents who assume the children automatically step in must check the continuation clause before anything else: it is one sentence in the statuts, and its absence is the most common source of SCI succession litigation.

On the succession side, Brexit changed nothing about the European rule — but everything about assuming England will apply it back. The EU Succession Regulation sets one national law for the whole estate: failing a choice, the law of the deceased’s last habitual residence governs everything, and the French notariat confirms that failing a choice, the connecting factor is the last habitual residence of the deceased (art. 21-1) — see Regulation 650/2012 on international successions on notaires.fr. The regulation’s unifying ambition is stated on the same page: a single national law will govern the whole succession. A British retiree habitually resident in France who leaves no choice dies under French succession law for everything, SCI shares included. The escape is the professio juris, the choice of national law: a British national may designate English law for the whole estate, shares included, and the French notaire must apply it. Our dedicated guide explains how to draft that choice so a French notaire cannot brush it aside, and what it means for children the French reserve would otherwise protect: British Will, French House After Brexit: Choosing English Law, Keeping Your Children Protected. The full regulation text is freely consultable at Regulation (EU) No 650/2012. One caveat the notariat stresses: Britain is a third State for this instrument, so an English choice validly made is applied in France, but do not expect an English court to mirror the reasoning for French assets litigated in London — coordinate both wills.

Tax follows its own map, and the SCI does not hide the house from it. Article 750 ter of the Tax Code taxes French-situs property held indirectly: it catches “Les biens meubles et immeubles, que ces derniers soient possédés directement ou indirectement, situés en France”, and deems property indirectly held where it “appartient à des personnes morales ou des organismes dont le donateur ou le défunt, seul ou conjointement avec son conjoint, leurs ascendants ou descendants ou leurs frères et soeurs, détient plus de la moitié des actions, parts ou droits, directement ou par l’intermédiaire d’une chaîne de participations” — see article 750 ter of the Tax Code on Légifrance. The family SCI holding the Dordogne farmhouse is precisely that chain. French succession duty therefore strikes the shares to the extent of the French property, under the Franco-British succession treaty of 1963 and French domestic allowances, with six months to file where the death occurs in France and twelve where it occurs in Britain. Our guide on deaths owning French houses details the treaty mechanics, the deadlines and the challenge routes at British Owner Dies Owning a French House: the 1963 Treaty, the Notaire’s Deadlines and How to Challenge Double Tax, and executors facing a French bank or notaire who will not recognise English probate should read British Executor Locked Out of a French House and Bank Account: English Probate, the European Certificate and How to Challenge a Refusal.

For the surviving spouse, the instrument that matters most is rarely the will — it is the démembrement, the splitting of ownership into a life interest and a bare reversion. The usufruit, the life interest, is defined by article 578 of the Civil Code: “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.” — see article 578 of the Civil Code on Légifrance. Give the widow the usufruit of the shares and the children the nue-propriété, the bare ownership, and she occupies the house, receives the rents and votes the dividends, while they own the capital that reverts whole on her death. Voting follows a split the spouses must understand: “Le droit de vote appartient au nu-propriétaire, sauf pour les décisions concernant l’affectation des bénéfices, où il est réservé à l’usufruitier.” — see article 1844 of the Civil Code on Légifrance. She votes the money; they vote the structure — unless the statuts say otherwise, which well-drafted ones do by handing the survivor the votes that keep her home. And the Cour de cassation drew the boundary of her status with precision in a 2022 family-SCI dispute: “l’usufruitier de parts sociales ne peut se voir reconnaître la qualité d’associé, qui n’appartient qu’au nu-propriétaire, mais qu’il doit pouvoir provoquer une délibération des associés sur une question susceptible d’avoir une incidence directe sur son droit de jouissance.” — see Third Civil Chamber, 16 February 2022, appeal No 20-15.164 on Légifrance. She is not a shareholder, but she cannot be silenced on decisions touching her enjoyment — and the same ruling recalls the lever: “un associé non gérant d’une société civile peut à tout moment, par lettre recommandée, demander au gérant de provoquer une délibération des associés sur une question déterminée.” A surviving spouse frozen out by children-shareholders writes that registered letter before instructing lawyers.

B. The notaire says no, the family says sell: how do you challenge a blocked SCI succession?

Three blockages recur in British files, and each has its own remedy. Learn to recognise which one you face, because the wrong procedure wastes the deadline that the right one needed.

First blockage: the notaire refuses to apply the English-law choice, or the bank will not release funds on an English grant. Challenge the paper, not the person. Ask for the refusal in writing with its legal basis, then have the will, the choice clause and the death certificate reviewed against the regulation’s unity principle — one national law for the whole estate, chosen nationality included. Most refusals collapse at this stage: they rest on habit, on an old file note that that English law cannot apply to French land, or on confusing the tax treaty with the succession rule. Where the office persists, instruct an avocat to put the analysis in a formal letter before action and, if needed, seize the civil court for a ruling on the applicable law and the devolution of the shares. The European Certificate of Succession, drawn up by the notaire once the law is settled, then circulates the heir’s status to every bank and registry. Time matters more than force: successions have filing and payment deadlines running while the legal argument continues, so protect the fiscal position — file, pay under reservation where necessary — while contesting the civil analysis. Our executor guide walks this two-track strategy step by step at British Executor Locked Out of a French House and Bank Account.

Second blockage: the family turns on itself. Surviving shareholders refuse agrément to the children, or one camp petitions the court to dissolve the company for mésentente, the deep disagreement between shareholders. The statute sets the bar for judicial dissolution high: a court may end the company early “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” — see article 1844-7, 5° of the Civil Code on Légifrance. Quarrel is not enough; paralysis is required. The Cour de cassation enforces the distinction strictly: censuring judges who dissolved a family company on evidence of entrenched antagonism, it held that “par des motifs impropres à établir que la mésentente entre les associés paralysait le fonctionnement de la société, la cour d’appel n’a pas donné de base légale à sa décision” — see Commercial Chamber, 5 April 2018, appeal No 16-19.829 on Légifrance. The lesson for the British shareholder facing a dissolution petition from siblings or in-laws is tactical: keep the company functioning — convene meetings, keep accounts, pay creditors, minute every decision — because a functioning company cannot be dissolved for mésentente, however toxic the atmosphere. Conversely, the shareholder genuinely trapped in a deadlocked SCI should build the opposite file: unanswered convocations, unpaid suppliers, blocked accounts, decisions the gérant cannot take — proof of paralysis, not proof of shouting. And remember the survivor’s lever from the 2022 ruling: the registered letter demanding a deliberation on any question touching the life interest, which forces the machinery to move and creates the written record the court will later read.

Third blockage: the tax bill — French duty on the shares under article 750 ter, a 3 percent assessment for a missed disclosure year, or a British demand on the same value. Challenge in the order the law prescribes, and diary every date. For French assessments, file the administrative claim (réclamation contentieuse) with the tax office first, attaching the treaty analysis, the valuations and the proof of filing; most double-tax cases are won here, on paper, before any judge. If the administration rejects expressly or stays silent, the dispute moves to the administrative court (tribunal administratif) of the property’s location — and the clock is merciless: “La juridiction ne peut être saisie que par voie de recours formé contre une décision, et ce, dans les deux mois à partir de la notification ou de la publication de la décision attaquée.” — see article R421-1 of the Administrative Justice Code on Légifrance. Two months from refusal, not a day more. For the 3 percent tax, the winning file proves the exemption positively: French seat or treaty-State seat plus the timely disclosure of buildings and of every member above 1 percent — the 2024 ruling leaves no room for merely substantial compliance through eventual beneficiaries. For British tax on the same shares, the 2008 treaty credit mechanism and HMRC’s foreign-income pages frame the claim the other way round, and the French assessment, once corrected, becomes the evidence London needs. Never pay the same tax twice in silence while waiting to see: pay, reserve in writing, claim, and litigate the refusal — the reserved payment stops penalties growing while the challenge runs.

Conclusion

The family SCI remains, after Brexit, the best vehicle a British family can give its French house — provided it is drafted as a succession instrument, not signed as a template. Put the continuation clause in the statuts so heirs enter rather than beg; write the English-law choice into a valid will so one law governs the shares; split enjoyment and capital through démembrement so the survivor keeps the home and the vote on the money; file the May disclosures every year so the 3 percent tax stays theoretical; and value the shares honestly each January so the IFI never arrives as a surprise. Each of these steps costs a fraction of the dispute it prevents. And when prevention has failed — the notaire who will not hear of English law, the siblings voting agrément down, the dissolution petition dressed up as mésentente, the double assessment from Paris and London — the remedies exist, they are written in the articles and rulings above, and they reward the family whose file is complete and whose deadlines are met. A SCI is a contract for the living that proves its worth among the dead: draft it for the quarrel you hope never comes, and it will carry the house, and the family, through.

Need a quick opinion on your case?

If you are British and hold a French house in a SCI — or are thinking of putting one there — and a succession, a shareholder dispute, a 3 percent assessment or a double-tax bill has just arrived, speak to a lawyer (avocat) before the deadline expires. Our initial telephone consultation, 80 EUR incl. VAT, gives you a clear answer on your file within 48 hours. Call +33 6 46 60 58 22 (Maître Reda Kohen) or write via our contact page.