Since Brexit turned British buyers into third-country nationals, the old reflex of buying a French holiday home in joint names deserves a second look. Many British families now hold their house in the Dordogne, the Luberon or the Cotentin through a société civile immobilière, usually shortened to SCI — a French non-trading property company whose only purpose is to own and manage the family home. The structure is neither a tax haven nor a way around French succession law, but it changes three things that matter to a British owner: who can block a sale, how the house is taxed year by year, and what your children actually inherit. This guide explains, in plain English, how a family SCI is created and run, what it costs in French tax while you own it, how shares pass on death or divorce under the European Succession Regulation, and how to challenge a refusal or an unfair bill when the notaire (the French public-officer conveyancer who alone can transfer land), the bank or the tax office says no.

I. Buying and running a French house through a family SCI after Brexit

A. Creating the SCI and putting the house into it: statutes, shares, Brexit paperwork

A SCI is a société civile, a civil (non-commercial) company. Article 1832 of the Civil Code defines the foundation of every French company in these words: “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 ordinary English, two or more people agree to put property or effort into a common venture in order to share the profit or benefit from the saving that results. Article 1845 then confirms that “Les dispositions du présent chapitre sont applicables à toutes les sociétés civiles”, so the whole civil-company framework of the Code applies to your family SCI unless a special statute says otherwise (Article 1832, Code civil, Légifrance; Article 1845, Code civil, Légifrance).

In practice, a British couple — very often with one or two adult children as minority shareholders — sign statuts (articles of association) before a notaire or under private signature, contribute cash, and the newly formed SCI buys the house. The price is paid by the company, the title deed (acte authentique) names the SCI as owner, and each family member owns parts sociales (shares) in proportion to the contribution. Because shares are movable property while the house is immovable, later gifts of shares between parents and children follow a simpler and cheaper paperwork route than gifts of bricks and mortar, and the parents can keep control through a well-drafted gérance (management) clause even after giving most of the capital away. That combination — control retained, capital transmitted gradually — is the main reason British families choose the SCI over direct joint ownership, where French indivision (the default co-ownership regime between heirs, in which every decision needs every co-owner) can paralyse the sale of the house after the first death.

Brexit added one layer of paperwork that did not exist before 2021. British shareholders are now non-EU nationals, so the notaire will ask for passports, proof of address, and sometimes evidence of the source of funds under anti-money-laundering rules that French banks apply with particular strictness to third-country nationals. A British resident buyer who needs a French mortgage should expect the bank to ask for a larger deposit and for life-insurance cover from an approved insurer, and to refuse files where the SCI has only just been created and has no accounts. These are commercial decisions, not legal bars: no statute forbids a British national from forming or joining a SCI. If a bank refuses the loan, the remedy is a second application elsewhere with a full file, not litigation; if a notaire refuses to execute the deed, you are entitled to ask for the precise legal ground in writing and to instruct another office, because the refusal of a public officer to act must rest on a stated reason.

The statutes deserve more attention than most families give them. Three clauses decide the future of the company: the agrément clause (the approval procedure for any new shareholder, which keeps strangers out after a divorce or a death), the valuation clause fixing how departing shares are priced, and the withdrawal clause organising the retrait (the voluntary exit of a shareholder). A recent decision of the Cour de cassation shows why the withdrawal clause matters so much. On 24 September 2026 the Third Civil Chamber, in a judgment published for the Bulletin (pourvoi n° 24-17.185), recalled that “Selon le premier de ces textes, les conventions légalement formées tiennent lieu de loi à ceux qui les ont faites”, and then held that “cette règle, qui, pour l’application de l’article 1869 du code précité, n’est que supplétive de la volonté des associés, est susceptible de faire l’objet d’une clause statutaire contraire” (Cass., 3e civ., 24 Sept. 2026, n° 24-17.185, courdecassation.fr). In plain terms: the judge-made rule that a withdrawing shareholder keeps that status until repaid is only a default. Your statutes can say otherwise, and what they say will decide whether an exiting parent is still liable for company debts while waiting for payment. Have the clause drafted deliberately, in both directions, before anyone wants to leave.

Article 1869 itself, which governs voluntary withdrawal, provides: “Sans préjudice des droits des tiers, un associé peut se retirer totalement ou partiellement de la société, dans les conditions prévues par les statuts ou, à défaut, après autorisation donnée par une décision unanime des autres associés.” It continues: “A moins qu’il ne soit fait application de l’article 1844-9 (3ème alinéa), l’associé qui se retire a droit au remboursement de la valeur de ses droits sociaux, fixée, à défaut d’accord amiable, conformément à l’article 1843-4”. (Article 1869, Code civil, Légifrance). The cross-reference to Article 1843-4 is the pricing engine of every exit, and it now reads, in its current version: “L’expert ainsi désigné est tenu d’appliquer, lorsqu’elles existent, les règles et modalités de détermination de la valeur prévues par les statuts de la société ou par toute convention liant les parties.” (Article 1843-4, Code civil, Légifrance). Note the change carefully: under the former wording, the Cour de cassation had held that “il appartenait à l’expert de déterminer lui-même, selon les critères qu’il jugeait appropriés à l’espèce, et sans être lié par la convention ou les directives des parties, la valeur des droits sociaux litigieux” (Cass., com., 13 Sept. 2017, n° 16-12.978, courdecassation.fr). That 2017 solution belonged to the old text. Since the reform, the independent valuer must apply the valuation rules your statutes contain when they exist — one more reason to write a serious valuation clause on day one rather than discovering its absence on the day of the family quarrel.

Day-to-day management sits with the gérant (manager), who may or may not be a shareholder. Article 1846 of the Civil Code states that “La société est gérée par une ou plusieurs personnes, associées ou non”, appointed under the conditions the statutes fix, and it organises the fallback where the company is left without a manager: any shareholder may call a meeting or ask the court to appoint an agent solely to nominate one (Article 1846, Code civil, Légifrance). For a British family, the practical lesson is to name a successor manager in the statutes — typically the surviving spouse — so the SCI never drifts without a signature when the bank, the insurer or the tax office writes. Where disagreement turns into deadlock, French courts can appoint an administrateur provisoire (a provisional administrator who temporarily runs the company), but the threshold is high: the Cour de cassation quashed a decision that had simply relied on a vacant management and an alleged atmosphere of disagreement, holding that the lower court should have investigated “si les sociétés ne fonctionnaient pas sans difficulté en dépit de la vacance de droit de la gérance” — whether the companies were in fact operating without difficulty despite the legally vacant management (Cass., 3e civ., 16 Nov. 2017, n° 16-23.685, courdecassation.fr). Mere tension between British siblings is not enough; you must show circumstances that make normal operation impossible and an imminent danger to the company.

B. Paying French tax year by year: rental income, wealth tax and the 3% filing that traps foreign-owned companies

The default tax regime of a family SCI is transparency, called translucidité in French practice. Each shareholder is taxed personally on a slice of the company’s result, whether or not any cash is distributed. Article 8 of the General Tax Code (Code général des impôts, the CGI) provides that members of qualifying civil companies are “personnellement soumis à l’impôt sur le revenu pour la part de bénéfices sociaux correspondant à leurs droits dans la société” (Article 8, CGI, Légifrance). A parallel provision, Article 1655 ter, deems certain property companies to have no personality separate from their members for direct taxes and registration duties, so that “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” (Article 1655 ter, CGI, Légifrance). For a British family that simply lives in the house and never lets it, the consequence is usually neutral: no rental profit, no income tax on that profit, but no deduction of the running costs either.

Trouble starts the moment the SCI earns money. A family SCI that regularly lets the house furnished — the classic gîte or seasonal holiday let — crosses into commercial activity, and the tax office may reclassify it for corporation tax (impôt sur les sociétés). Article 206 of the CGI lists the companies liable to that tax, subject to the exceptions including Article 1655 ter (Article 206, CGI, Légifrance). Once inside corporation tax, rents are taxed at company level, shareholders are taxed again on dividends, and a later sale of the house is taxed on the company’s real capital gain with no private-residence relief and no holding-period allowance of the kind private sellers enjoy. The SCI can also positively elect for corporation tax, which sometimes suits a letting business that wants to depreciate the building — but the election is very difficult to reverse, and it transforms the succession arithmetic for the children. British owners tempted by the letting income should therefore decide the regime before the first booking, declare the letting activity correctly, and keep the company’s accounts separate from the family’s holiday spending.

Where the shareholders live changes who taxes what. Rents from a French house are French-source income: Article 164 B of the CGI treats as French-source “Les revenus d’immeubles sis en France ou de droits relatifs à ces immeubles” (Article 164 B, CGI, Légifrance). A British-resident shareholder declares the French rental slice in France (form 2044 for property income, then form 2042) and again in the United Kingdom, where the France–United Kingdom double tax treaty gives a foreign tax credit so the same pound of rent is not taxed twice in full. Since Brexit nothing in that mechanism has changed, but HM Revenue & Customs now treats the French tax-paid figure exactly like any other foreign tax credit claim, with the familiar paperwork burden. A British family that moved to France and became French tax resident declares worldwide income in France instead, including any remaining United Kingdom rental income, and claims the treaty credit the other way round. The yearly 2042/2047/3916 cycle for newcomers is described in our companion guide to the first French tax return, and the SCI rental slice slots into that same cycle.

The specifically British trap is the annual 3% tax on foreign-held French property. Article 990 D of the CGI provides that legal entities holding French real estate directly or through intermediate entities “sont redevables d’une taxe annuelle égale à 3 % de la valeur vénale de ces immeubles ou droits” (Article 990 D, CGI, Légifrance). Three per cent of market value every year is confiscatory by design; it exists to force disclosure of the real owners. A French SCI owned directly by British individuals who declare everything is in practice outside the danger zone, because the tax bites hardest where ownership chains hide behind non-cooperative entities. Article 990 E then lists the exemptions, starting with cases where French property represents less than half of French-held assets and running through entities established in states that give France administrative assistance and proper identification of shareholders (Article 990 E, CGI, Légifrance). Since Brexit, the United Kingdom remains a cooperating state with a full information-exchange treaty, so a transparent British-owned SCI that files its 2072 return (the annual SCI declaration of premises, shareholders and results) and identifies its members has nothing to fear from the 3% tax — but a structure that interposes an opaque offshore vehicle between the family and the SCI can fall straight into it. Keep the chain short, French, and declared.

Two further annual taxes complete the picture and neither is optional. The taxe foncière (the local property-ownership tax) is billed to the SCI as owner every autumn and must be paid from the company account, with shareholders reimbursing the company according to their shares. The taxe d’habitation sur les résidences secondaires (the council-type tax that still applies to second homes) is billed where the house is a holiday home rather than someone’s main residence, and furnished second homes in tight housing zones can attract a surcharge. British owners sometimes discover these bills late because they went to the French house while the family was in London; setting up online access on impots.gouv.fr and a French direct debit in the company’s name avoids penalties. Finally, high-value holdings fall within the impôt sur la fortune immobilière (IFI, the French tax on real-estate wealth above the threshold): SCI shares representing French property count towards each shareholder’s taxable base in proportion to the holding, wherever the shareholder lives, subject to treaty attribution rules. Declare the shares, value them consistently with the company’s balance sheet, and keep the valuation memo with the file.

II. Passing on, selling and defending the SCI when things go wrong

A. Selling the shares or the house, dying with shares, and the English-law choice that protects British children

There are two ways out of a SCI: sell the shares, or have the SCI sell the house. Selling shares is a private deed, quick and cheap in notarial fees, but the buyer inherits the company’s history — including any hidden tax exposure — so buyers discount the price or demand guarantees. Selling the house inside the company triggers the capital-gains machinery of Article 150 U of the CGI, which makes gains on buildings and related rights liable to income tax under the property-gains rules (Article 150 U, CGI, Légifrance). For a transparent family SCI, each shareholder is taxed on the personal-gains scale with the familiar reliefs for holding period, while a SCI under corporation tax pays at company level with no such reliefs. Non-resident sellers face a further mechanism: Article 244 bis A of the CGI subjects gains realised by non-residents on the disposal of French real estate and related rights to a levy collected in France, subject to treaty limits (Article 244 bis A, CGI, Légifrance). A British-resident shareholder who sells SCI shares linked mainly to French property therefore pays the levy in France and claims relief in the United Kingdom under the treaty — and must appoint a French tax representative (représentant fiscal) where the rules still require one for the price level concerned.

Death is where the SCI earns its reputation — and where sloppy drafting destroys it. Under the European Succession Regulation (Regulation (EU) No 650/2012), the default law for the whole estate is the law of the country where the deceased was habitually resident, but Article 22 allows anyone to choose in their will the law of a state whose nationality they hold, whether at the time of the choice or at death. A British national living in France can therefore elect English law to govern the succession as a whole, sidestepping the French forced-heirship share (réserve héréditaire) that otherwise reserves a fraction of the estate to the children. The full official text is Regulation (EU) No 650/2012 of 4 July 2012 on jurisdiction and applicable law in succession matters (OJ L 201 of 27 July 2012). The election must be express, in a valid will, and it covers the SCI shares as movable property — though French land-registration practice still requires the French notaire to settle the estate (règlement de succession) with a European Certificate of Succession or an English grant of probate properly recognised. Our detailed guide to the British will covering a French house explains the drafting, and the present article assumes that election is in place: without it, the SCI shares fall into the French default and the children’s reserved rights apply in full.

Even with English law elected, French inheritance tax still bites on French property. The 1963 France–United Kingdom estate-treaty framework attributes French houses to French taxation, and each child beneficiary is taxed in France on the French share under French scales and allowances, with the United Kingdom giving credit where double taxation would otherwise arise. SCI shares do not escape this: they represent the house. Gifts of shares during the parents’ lifetime use the same allowances as gifts of land but restart the fifteen-year clock between the same donor and donee, which is why British parents drip-feed shares to children in successive tranches. On death, Article 1870-1 of the Civil Code protects heirs who do not become shareholders: “Les héritiers ou légataires qui ne deviennent pas associés n’ont droit qu’à la valeur des parts sociales de leur auteur”, payable by the new holders or by the company on buy-back for cancellation, with value fixed at the date of death under Article 1843-4 (Article 1870-1, Code civil, Légifrance). Read that twice before drafting the agrément clause: a child the statutes refuse as a shareholder still takes cash equal to the shares’ value, and the company must find the money.

Divorce interacts with the SCI in a way British couples rarely anticipate. Shares bought with joint funds during an English marriage are usually treated as a shared resource on divorce in England, while in France the matrimonial regime and the name on the share register decide. An English financial-remedy order transferring French-situated value needs recognition and practical enforcement in France, and the SCI’s agrément clause can block an ex-spouse from entering the register — which converts the claim into a cash equivalent rather than cancelling it. Couples who buy through a SCI should therefore align three documents at purchase: the English-law position under any pre- or post-nuptial agreement, the French matrimonial regime declared before the notaire, and the SCI statutes’ approval clause. Where they contradict each other, the divorce will be expensive. Where they agree, the SCI works exactly as intended: the family home stays in the company, the departing spouse is bought out at a pre-agreed valuation, and the children’s future shares are untouched.

B. Challenging a blocked file, a rejected valuation or an unfair French tax bill from across the Channel

British owners challenge French decisions through the same doors as French owners, with one extra hurdle: distance. Start with the file, not the court. If a notaire blocks the transfer of shares or the registration of an English grant, ask in writing which document is missing and which statute requires it; most blocks dissolve once the European Certificate of Succession, the sworn translation, or the missing company resolution is supplied. If a bank freezes the SCI account after a death, the heirs prove their standing with the death certificate, the will, and the notaire‘s certificate of heirs (acte de notoriété), and the bank must release its freeze once standing is shown. If the shareholders fall into deadlock — siblings who no longer speak, a manager who will not call a meeting — any shareholder can ask the president of the judicial court for a court-appointed agent to convene the meeting and appoint a manager under Article 1846, and only where the company faces genuine paralysis and imminent peril should a provisional administrator be sought, given the strict test recalled above. Keep every letter, serve formal notice (mise en demeure) before suing, and remember that French limitation periods run while you hesitate in London.

Valuation disputes follow their own track. Where the statutes contain a valuation method, the Article 1843-4 valuer must apply it; where they are silent or the figure is contested, the president of the judicial court appoints the valuer in fast-track proceedings with no appeal, and the resulting figure binds the buy-out. The 2017 Mousquetaires ruling remains useful for what it says about method — the valuer forms an independent view on appropriate criteria — but it must now be read subject to the reformed text that gives priority to the parties’ own agreed rules. In practice, commission a private valuation first, propose it in writing with the accounts, and only then trigger the court appointment if the gap persists; judges notice which side behaved reasonably. For the 24 September 2026 withdrawal ruling, the operational point is symmetrical: check whether your statutes displace the default timing of exit and payment, because the Cour de cassation will enforce what the family actually signed, for better or worse.

Tax bills are challenged through the standard French remedies, and the SCI changes nothing about the doors available. A wrong taxe foncière, a 3% assessment that should never have been raised against a transparent declared SCI, or a capital-gains computation that ignores the holding-period relief is first contested by written claim to the tax office (réclamation contentieuse), with suspension of enforced recovery available on request with guarantees, then before the administrative court (tribunal administratif) within the statutory time limit stated on the assessment notice. Non-resident shareholders can act by post and through a French representative, and the claim must identify the tax, the year, the amount disputed, and the legal ground — wrong person taxed, wrong base, treaty credit denied — with the SCI accounts and the 2072 return attached. The France–United Kingdom treaty credit is the most commonly mishandled point: attach the French assessment to the United Kingdom return and the United Kingdom computation to the French file where each side asks for proof, because each administration tends to assume the other has already given relief.

Practical evidence wins these fights. Keep the SCI file in one place, physically or digitally: the registered statutes and every amendment, the share-transfer register (registre des mouvements de titres), yearly minutes even when the only resolution is to approve empty accounts, the 2072 returns with proof of filing, the property-tax notices with proof of payment, the letting contracts and rental accounts if any, and the will containing the English-law election with its translation. A British owner who can produce that bundle answers any notaire, bank, or tax inspector within days, while one who cannot spends months reconstructing it from Kent. The United Kingdom side of the evidence matters too: HM Revenue & Customs guidance in the official “Living in France” series (Living in France, gov.uk) and the French administration’s own SCI pages on service-public.fr (Société civile immobilière (SCI), service-public.fr) state the current procedural position in plain terms and are worth printing into the file alongside the statute extracts from Légifrance and the impots.gouv.fr notices (Espace des non-résidents, impots.gouv.fr). When the dispute needs a lawyer, that bundle is the first thing asked for — and the thing that decides whether the challenge is filed in time.

Conclusion

A family SCI remains, after Brexit, the most flexible envelope for a British family house in France: it avoids the paralysis of direct co-ownership, lets parents transmit shares gradually while keeping management, and plugs cleanly into the English-law election that protects the children’s expectations. But the envelope only works if it is run as a company — real statutes with a real valuation clause, yearly minutes, filed 2072 returns, taxes paid from the company account, and a will that expressly chooses English law. The recent case law sharpens the warning: the Cour de cassation enforces the withdrawal and valuation machinery the family actually signed, appoints outsiders only where the company is genuinely paralysed, and lets the independent valuer be bound by the parties’ own rules. Set the SCI up properly, fund it transparently, declare it every year, and it will do quietly exactly what a British family buys it for: hold the house, organise the generations, and survive the first death without a forced sale.