Since Brexit, British families buying a French holiday home face the same dream with heavier paperwork: a house in the Dordogne, the Luberon or Brittany, owned from London, used for part of the year, perhaps let out while empty, and one day passed to the children. Many solve these questions with an SCI, a société civile immobilière, which is a French non-trading property company whose only purpose is to own and manage one or more buildings. The family does not own the bricks directly; each member owns shares in the company, and the company owns the house. That single difference reshapes everything: who signs the purchase deed, who can block a sale, how the rent is taxed, how the children inherit, and which bill arrives when the French tax office disagrees.

This guide explains, for a British reader with no French legal training, how a family SCI is created, how it is run from across the Channel, how a house held inside it is taxed and let, how the shares pass on death, and how to challenge a refusal or a reassessment. Every French term is explained the first time it appears. The legal statements below rest on the codes in force on 29 September 2026, on the official company and tax pages of the French administration, on the British government’s own guidance for living in France, and on published decisions of the Cour de cassation, the highest French civil court. A family SCI suits many British buyers, but it is not a magic shield against tax or against the forced share of children, known in French as the réserve héréditaire. Used with clear statutes, honest declarations and a will that chooses the right law, it gives a British family control, flexibility and a paper trail that stands up when challenged.

I. How do British families set up and run an SCI that really owns the French home after Brexit?

A. How do British buyers create an SCI that actually holds the house?

An SCI is a company, not a trust and not a joint tenancy. Under article 1832 of the Civil Code, “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 plain English, at least two people agree to put assets together for their common benefit, and “Les associés s’engagent à contribuer aux pertes.” In plain English this means each partner accepts a share of the losses. For a British couple, the two partners are usually the spouses; for a wider family, parents and adult children subscribe together. Each contributes money, the company is registered, and the company buys the house from the seller before the notaire, the French public officer who authenticates conveyances. From that day the land registry shows the SCI as owner, while the family members are associés, the French word for partners or shareholders in such a company.

Four practical steps decide whether the structure will survive meeting with reality. First, the statuts, the written articles of association, must be drafted for a British family rather than copied from a template. They should state the registered office, which is often the French house itself or the French accountant’s address, the life of the company, which can run up to ninety-nine years, the share of each partner, who manages it, how new partners are approved, and what happens when a partner dies. The official French business portal summarises the compulsory contents and formalities on its page for the société civile immobilière (SCI), and the family should read that page before signing anything. Second, the capital must reflect the real money: if Mum and Dad pay eighty per cent of the price and two children pay ten per cent each, the shares should mirror those contributions, because the tax office and, later, the children’s co-heirs will compare the capital with the cash actually transferred. Third, the purchase must be funded openly, with bank transfers from the partners’ accounts to the company account and then to the notaire, so that no one can later characterise the arrangement as a hidden gift. Fourth, since Brexit, British citizens are third-country nationals in France, so the notaire will ask for passports, proof of address, marriage details and the origin of funds with visible care; anti-money-laundering checks take longer for non-EU buyers, and powers of attorney signed in England for use in France may need an apostille, the international stamp that authenticates a foreign document, plus a sworn translation.

The choice of manager, called the gérant, matters more than most families expect. Article 1846 of the Civil Code provides that “La société est gérée par une ou plusieurs personnes, associées ou non, nommées soit par les statuts, soit par un acte distinct, soit par une décision des associés.” In practice the parents appoint themselves, jointly or in turn, so that either can sign the insurance renewal, instruct the local caretaker or open the company’s bank account. A UK-resident gérant is lawful, but banks, insurers and energy suppliers sometimes hesitate when every signatory lives abroad, so many families appoint one parent and keep a French correspondence address with their accountant. The statutes should also organise decision-making: an annual meeting of partners, called an assemblée générale, even held by video call, with written minutes kept in a minute book, turns the SCI from a mere label into a company that behaves like one. When the tax office or a disappointed heir later asks who decided what, those minutes are the family’s best evidence.

One warning belongs at this early stage. An SCI whose only asset is a house used free of charge by its own partners invites the suspicion that it is fictitious, a shell with no company life. French courts can disregard sham companies and tax the partners as direct owners. The safeguard is genuine company life: contributions actually paid, accounts actually kept, meetings actually minuted, rent actually declared when the house is let, and insurance, taxe foncière, the French local property tax on owners, and repair bills paid from the company account. A family that treats the SCI as a real company will find it protects them; a family that treats it as letterhead will find it deserts them at the first audit.

B. How is the SCI run year by year when the family lives across the Channel?

Once registered, the SCI has a quiet annual rhythm that a British family can keep from London with one French professional correspondent. The gérant calls the yearly meeting, presents simple accounts showing rent received, charges paid and the balance owed to or by each partner, and the partners vote to approve them. When the house is used by the family itself, the accounts should record that private occupation openly rather than hide it; many advisers record a modest occupation indemnity or, at minimum, a clear note that the partners occupied the house for a stated number of weeks, so that the company’s generosity towards its own members is documented rather than clandestine. The minutes are signed, stored with the bank statements and invoices, and sent to the accountant, called the expert-comptable, who prepares the yearly tax return of the company. A company that files every year, even when it owes nothing, looks like what it claims to be: a transparent owner, not a hiding place.

Money movements between the family and the company deserve the same discipline. When the roof needs repairing, the partners advance funds to the company’s bank account, and those advances are recorded in comptes courants d’associés, the partners’ current accounts with the company, which are simply loans from each partner that the company may repay later. Each advance should carry a transfer reference with the partner’s name, and large advances are best confirmed by a short written agreement noting the amount, the absence or presence of interest, and the repayment terms. What must never happen is the reverse: family members paying the French builder, the insurer or the taxe foncière directly from a personal UK account while the company pretends to be the owner. Mixed payments blur the boundary between the company’s money and the family’s money, and in a dispute with the tax office or between siblings that blur is always read against the family. One company account in France, fed by the partners and paying every French bill, is the simplest protection a British family can buy.

Brexit adds three cross-Channel frictions to this routine, all manageable with foresight. The first is banking: some French banks closed accounts for UK residents or asked for extra residence evidence after 2021, so the SCI should keep a French account in the company’s own name from the start and keep the proof of the company’s registration, the Kbis extract, on file for every compliance check. The second is presence: because no partner may hold a French residence permit, as explained in the British government’s own guidance for living in France, the family organises caretaking, meter readings and emergency access through a local agent, and gives that agent a written mandate rather than informal oral instructions. The third is time in France: partners who stay long enough to become French tax residents enter the worldwide reporting system described in Part II, while those who remain UK residents report only their French-source income in France. Both positions are lawful; what causes trouble is drifting between them without advice. A short annual review with the accountant, asking plainly where each partner stands for residence this year, prevents most surprises.

The statutes should also plan for disagreement while everyone still likes each other. What majority sells the house if one child wants to keep it and another wants cash? Who values the shares when a partner leaves? Can a partner pledge shares for a personal loan? The default rule of French company law is strict: article 1861 of the Civil Code states that “Les parts sociales ne peuvent être cédées qu’avec l’agrément de tous les associés.” In plain English this means no sale of shares to an outsider without the approval, called agrément, of all the partners. The statutes may soften that rule to a defined majority or entrust approval to the gérant, and they may waive approval for gifts between parents and children, but whatever the family chooses must be written down before the quarrel, not after. The Cour de cassation enforces this approval mechanism exactly as written: in a decision of 7 December 2010, appeal number 09-17.351, the commercial chamber recalled expressly, “Vu les articles 1861 et 1862 du code civil” — the court held that the first of those texts makes every transfer of shares in a civil company subject to approval by all the partners, subject only to the adjustments the statutes themselves organise. For a British family, the lesson is direct: the agrément clause is the lock on the front door of the family home, and the family itself cuts the key when it drafts the statutes.

II. How is an SCI-held French home taxed, let and passed on, and how do you challenge the bill or the blockage?

A. How are the rent, the gain and the wealth in an SCI taxed in France?

The starting point of French taxation is that a family SCI is normally transparent, which lawyers call translucide. Unless it rents furnished accommodation as a business or elects for corporation tax, the company itself pays no income tax; each partner is taxed personally on a share of the rent matching the share of the capital. Article 1655 ter of the General Tax Code expresses this by saying that qualifying property companies “sont réputées, quelle que soit leur forme juridique, ne pas avoir de personnalité distincte de celle de leurs membres pour l’application des impôts directs,” meaning the company is disregarded and the members are taxed directly. For a British family this has a practical consequence that surprises many: even a UK-resident partner is taxable in France on French rental profit, because article 164 B of the same code provides that “Sont considérés comme revenus de source française : a. Les revenus d’immeubles sis en France ou de droits relatifs à ces immeubles”. That single sentence is why rent from a French house is French-source income by definition. Each partner declares a share on the French return, and the France-United Kingdom double tax treaty then gives the United Kingdom, as the residence state, a credit for the French tax so the same rent is not taxed twice in full. Keeping the treaty working requires keeping the proof: French assessment notices, called avis d’imposition, attached to the British self-assessment return.

Letting the house while the family is back in Britain is where the prettiest plans meet the strictest rules. A family SCI that lets unfurnished on a long lease declares the rent under the ordinary property-income category, deducts insurance, agency fees, loan interest and the taxe foncière, and each partner pays tax and social charges on a share of the net result. A family SCI that lets furnished to holidaymakers enters a different world: furnished letting is a commercial activity in French law, the profits fall under industrial and commercial profits, and the company risks losing its transparency if furnished letting becomes its real business rather than an occasional extra. Registration comes first: article L. 324-1-1 of the Tourism Code defines holiday lets in these terms, “les meublés de tourisme sont des villas, appartements ou studios meublés, à l’usage exclusif du locataire, offerts à la location à une clientèle de passage qui n’y élit pas domicile” and continues, “Toute personne qui offre à la location un meublé de tourisme procède préalablement en personne à une déclaration soumise à enregistrement”. In plain English this means a prior declaration on the official portal before the first guest arrives. Many communes add a registration number that must appear on every advertisement, and the historic centres of large cities may require a prior change-of-use authorisation, called autorisation de changement d’usage. Fines for unregistered or unauthorised letting are imposed per night and per advertisement, and platforms must display the number; a British family that lets its Dordogne farmhouse for a few summer weeks through an agency should therefore confirm in writing that the declaration and the number are in place before the season starts.

Selling is the moment the SCI shows its second face. If the company sells the house, the gain is computed much as for a direct owner: article 150 U of the General Tax Code makes taxable “lors de la cession à titre onéreux de biens immobiliers bâtis ou non bâtis ou de droits relatifs à ces biens”. That wording covers a transparent SCI selling its building, and the partners each pay tax on a share of the gain with the familiar relief that grows with years of ownership. If instead a parent sells or gives SCI shares, the buyer steps into the company rather than buying bricks, which avoids new transfer duties on the building but transfers the company’s history, including its loans and its latent gain. That is why buyers of shares demand full accounts, proof that every tax return was filed, and a price reduction reflecting the tax the company would pay if it sold the house tomorrow. One trap must be named plainly: the exemption for selling one’s main home, which the same article reserves to buildings that meet the test “Qui constituent la résidence principale du cédant au jour de la cession”. That exemption never protects a British family’s French second home, whether held directly or through an SCI. Families who read press stories about tax-free sales should check that sentence first; a holiday home is not a main home, and the notaire will apply the text, not the headline.

Two annual wealth taxes complete the picture. First, the impôt sur la fortune immobilière, the French tax on real-estate wealth universally shortened to IFI, catches large estates: article 964 of the General Tax Code states, “Il est institué un impôt annuel sur les actifs immobiliers désigné sous le nom d’impôt sur la fortune immobilière”. It is chargeable above 1,300,000 euros of net property assets. Shares in an SCI that owns French property count towards that threshold for their property fraction, so a British family whose French house has risen in value should measure its total property wealth each January rather than assume a company wrapper removes it. Second, the annual 3 per cent tax on the market value of French property held through opaque foreign structures hangs over every non-resident arrangement: article 990 D of the General Tax Code targets entities which, “directement ou par entité interposée, possèdent un ou plusieurs immeubles situés en France ou sont titulaires de droits réels portant sur ces biens”. Those entities face for “une taxe annuelle égale à 3 % de la valeur vénale de ces immeubles ou droits.” A French SCI that declares its partners, files and pays its taxes has nothing to fear from this charge, because article 990 E opens with the words “La taxe prévue à l’article 990 D n’est pas applicable” to entities that qualify for exemption, including those resident in a state that exchanges information with France and that disclose their members each year. Since Brexit the United Kingdom is outside the European Union, so disclosure discipline matters more, not less: the Cour de cassation shows no indulgence towards entities that claim the exemption without filing properly. On 10 May 2024, in appeal number 21-11.230, the commercial chamber described a foreign foundation that had filed “afin de bénéficier de l’exonération de la taxe sur la valeur vénale des immeubles possédés en France par des entités juridiques”. It recalled that “L’administration fiscale a exercé son droit de reprise. It rejected the appeal. The message for a British family SCI is reassuring rather than frightening: declare the partners every year, and the 3 per cent charge stays a paragraph in a textbook rather than a line on an assessment.

B. How do SCI shares pass to the next generation and how do you fight a refusal or a tax bill?

For many British parents the SCI exists for one reason above all: to organise the handover to the children without forcing a sale of the house every time life changes. Shares are easier to divide than bedrooms. Parents can give shares gradually, keeping the use of the house while the children become partners; on a death, the children inherit shares rather than an undivided interest in bricks, and the surviving parent, often gérant, continues to manage the house without needing every heir to co-sign the insurance renewal. The statutes can reinforce this stability by requiring the remaining partners to approve any newcomer, which keeps an ex-spouse’s family or an heir’s creditor outside the company, and by giving the surviving partners a pre-emption right, called a droit de préemption, to buy the shares of a departing member at an independently valued price. None of this removes the children’s protected rights, and families should not believe anyone who promises otherwise. Article 912 of the Civil Code defines that “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,” and the next article fixes the arithmetic: article 913 provides that “Les libéralités, soit par actes entre vifs, soit par testament, ne pourront excéder la moitié des biens du disposant, s’il ne laisse à son décès qu’un enfant”. One third with two children and one quarter with three or more. Since the reform of 2021 that same article adds, for families connected to European Union states, that a foreign law chosen for the succession which leaves a child with nothing can be corrected by a compensatory levy on French assets. An English will that leaves everything to the second spouse and nothing to the children of the first marriage therefore needs careful drafting when a French house or SCI shares are involved, and the family should read our companion guide on choosing English law for a British will covering a French house before signing.

Valuation is the quiet battleground of every handover. The shares of a family SCI are not worth the market value of the house divided by the number of shares; buyers apply a discount, called a décote, for lack of control and lack of marketability, because a minority parcel in a family company cannot force a sale of the building and cannot easily be resold. The tax office knows this and accepts a reasoned discount supported by a valuer’s report, while it rejects round numbers pulled from the air. Families should therefore commission an independent valuation of the house, then a reasoned valuation of the shares explaining the discount, and keep both with the gift deed or the succession file. The same discipline applies when the company redeems shares or when one sibling buys out another: an agreed method in the statutes, such as the average of two independent valuations with a third expert if they differ by more than a stated margin, turns a future quarrel into an administrative step. Gifts of shares made more than fifteen years before death can also fall outside the French gift-tax computation, which is why advisers urge parents to start early rather than after the diagnosis; anticipation is lawful, concealment is not.

When something goes wrong, French law offers the family three distinct battlefields, and choosing the right one quickly is half the victory. If the partners refuse approval for a sale of shares and the seller is trapped, the statutes and the Civil Code organise the exit: the company or the remaining partners must buy the shares or present another buyer within a fixed period, failing which the approval is deemed granted. A refusal that is never followed by a buy-back offer is not a wall but a delay, and a short letter from a lawyer reminding the gérant of that timetable often unlocks the file. If the notaire declines to complete a transfer, the family should ask for the precise legal ground in writing: a missing approval, an unclear capacity of a UK-based signatory, an unpaid capital-gains assessment, or a filing omitted at the company registry. Most notaire refusals are requests for missing paper dressed as refusals, and supplying the approval minutes, the apostilled power of attorney, the company’s up-to-date registration extract and the tax clearance converts the refusal into a completion date. If the dispute is truly legal, for example siblings divided over the price or over whether the statutes allow the sale at all, the president of the judicial court, sitting in urgent proceedings known as référé, can appoint a provisional administrator or order a valuation, while the full court decides the substance later.

Tax bills follow their own procedure, and deadlines are merciless. A reassessment arrives as a proposition de rectification, a reasoned proposal that the family may answer within thirty days with documents and arguments; silence at this stage is the costliest mistake a British family can make, because the later stages review the file as it stands. If the assessment is maintained, the family files a formal claim, called a réclamation contentieuse, to the tax office, attaching the French returns, the treaty credit computations, the valuation reports and the company’s minutes that prove genuine company life. Only after that claim is rejected, expressly or by silence, does the case go to the administrative court, where the judge checks the legal basis, the calculation and the procedure. At each stage the family’s strongest weapons are the same papers this guide has recommended from the start: real statutes, real minutes, real bank transfers, filed returns and independent valuations. The family that kept that discipline usually settles at the first stage; the family that improvised usually discovers that improvisation has a price list.

Conclusion

A family SCI remains, after Brexit, the most flexible vehicle for a British family that wants to buy a French home together, share its use fairly, let it openly when empty, and hand it to the children without breaking it into pieces. Its strength is not secrecy but organisation: two or more partners bound by article 1832, managed under article 1846, locked by the approval rule of article 1861 as interpreted on 7 December 2010 in appeal 09-17.351, taxed transparently under article 1655 ter on French-source income caught by article 164 B, sold under article 150 U, measured for wealth tax under article 964, sheltered from the 3 per cent charge by honest disclosure under article 990 E, let to holidaymakers only after the declaration required by article L. 324-1-1 of the Tourism Code, and transmitted within the protected shares of articles 912 and 913 of the Civil Code. The decisions of 7 December 2010 and 10 May 2024 confirm that courts apply these texts exactly as written, for families and against them. British buyers who draft clear statutes, keep real minutes, move money through the company account, declare every year and value shares honestly will find the SCI does everything they bought it for; those who want it to hide income, dodge the children’s share or skip registration will find it does none of those things.