When a British shareholder of a French société civile immobilière (SCI, a civil property-holding company) dies, the family does not inherit the underlying house in the same way as an ordinary personal asset. The estate first has to establish what happens to the deceased person’s parts sociales (company shares), whether the heirs are admitted as members, whether another member or the SCI must buy them out, and what those shares were worth on the date of death. The Brexit dimension then adds a second layer: French succession tax, UK Inheritance Tax and the France–UK Convention on inheritance taxes may all examine the same economic value, but they do not use identical tests.

This article addresses the practical question for a British family living in, or connected with, France: what must the heirs, surviving members and French notaire (civil-law notary) do after the death of an SCI shareholder? It focuses on a French SCI holding French property. It does not explain how to purchase French property or how to incorporate a company. The answer depends on the SCI’s articles, the deceased person’s tax residence, the heirs’ residence, the location of the assets, the date of death and any will or succession agreement. The checklist below is therefore a framework for obtaining the right documents and asking the right questions, not a substitute for reviewing the actual articles and estate file.

I. What happens to French SCI shares when a British shareholder dies after Brexit?

A. Do the heirs become shareholders automatically, or must they obtain approval?

The starting point is the SCI’s articles of association, not the nationality of the heir. An SCI is a company with its own legal personality. The deceased owned shares in that company; the company owns the property. The death therefore triggers a succession in the shares and a review of the company’s governance documents. It does not, by itself, transfer the house into each heir’s personal name.

French law gives a default rule, subject to the articles. Article 1870 of the Civil Code states that La société n’est pas dissoute par le décès d’un associé—the company is not dissolved by the death of a member—and provides that it continues with the heirs or legatees unless the articles require them to be approved by the members. The current text is available on Légifrance, Civil Code article 1870. This is a continuity rule, not an answer to every admission question. The articles may provide for continuation with the surviving members, continuation with named persons, an approval procedure, or a buy-out mechanism.

“Approval” is the usual English translation of agrément. In practice, the notaire and the SCI’s manager should read the full clause rather than rely on a heading. The clause may distinguish between a spouse, descendants, other relatives and third-party legatees. It may require a vote by a specified majority, impose a period for the decision, state who may receive the shares if approval is refused, and give a method for fixing the price. A clause that looks simple in a copy of the articles can interact with later amendments, a usufruct, a shareholders’ agreement or a prior gift of bare ownership.

The heirs do not become registered members merely because they produce a British grant of probate or a family tree. The estate normally needs a French document establishing the devolution of the shares: for example, an acte de notoriété, meaning the notarial deed identifying the heirs, together with the will, death certificate and documents proving family status. A UK probate document can be important evidence, but it does not automatically replace the French notarial work needed to update the SCI’s register and deal with a French company. If there is a foreign will, a choice-of-law clause, a Scottish or Northern Irish connection, or a dispute over forced-heirship rights, the file needs cross-border succession advice before the manager records a transfer.

Once the heirs are identified, the manager should check the notice and voting requirements in the articles. A meeting or written resolution may be needed. Article 1854 of the Civil Code allows decisions to result from the consent of all members recorded in an instrument where the legal and constitutional conditions are met; the provision is accessible on Légifrance, Civil Code article 1854. That can be useful when a family wants a clear written decision, but unanimity cannot be assumed if the articles prescribe another process or if the members are divided.

The role attached to the shares also matters. A share may be split between a usufructuary—the person entitled to use the economic benefits—and a nu-propriétaire, the bare owner. The heirs may therefore inherit bare ownership while another person retains the usufruct. Article 1844 of the Civil Code deals with participation in collective decisions, representation of shares held in an indivision (undivided ownership) and voting arrangements between a usufructuary and bare owner. The official text is on Légifrance, Civil Code article 1844. The estate should not treat the death as a straightforward transfer of a whole bundle of unrestricted voting and income rights.

A British heir who lives in the United Kingdom may also need to provide certified translations, identity documents, evidence of address and documents capable of being accepted by the French notaire. The precise formalities vary with the document and its issuing authority. The key practical point is to ask the notaire and the SCI manager for a written list before a deadline expires. Sending an informal English will and assuming that the shares can be recorded immediately is a common source of delay.

The property itself remains owned by the SCI while this is being resolved. The death does not give an heir a personal right to occupy, sell or mortgage the building. Decisions affecting the property remain company decisions. If the estate needs rental income, insurance information, loan statements or accounts, the heirs should request them through the manager and preserve a record of all requests. A dispute over admission should not be allowed to become a dispute over the existence of the SCI or the ownership of its building.

B. What if the SCI’s articles exclude or delay an heir?

If the articles require approval and approval is refused, Article 1870-1 of the Civil Code becomes central. It provides that heirs or legatees who do not become members have only the value of the deceased member’s shares, and that this value is determined at the date of death under Article 1843-4. The official wording includes n’ont droit qu’à la valeur des parts sociales de leur auteur and La valeur de ces droits sociaux est déterminée au jour du décès; both propositions appear in Légifrance, Civil Code article 1870-1.

This mechanism separates two questions which families often mix up. First: who is entitled to be a member? Secondly: what sum is payable if an heir is not admitted? A refusal of approval does not normally make the inheritance disappear. It converts the heir’s position into a claim for the value of the shares, to be paid by the new holders or, in the circumstances provided by law, by the company itself. The articles may contain additional machinery, but they cannot be read in isolation from the mandatory statutory valuation framework.

The provision is especially important where the SCI is a family vehicle and the property has risen substantially in value. A surviving member may want the family to retain control of the building; an heir may want liquidity rather than a minority interest in a company. Neither side should treat the purchase price of the house many years earlier as the value of the shares. The relevant valuation must examine the company’s assets, liabilities, share rights and the facts existing at the date of death.

The Cour de cassation has dealt with articles that exclude heirs and provide for the continuation of the SCI with surviving members. In its decision of 15 March 2018, Cour de cassation, troisième chambre civile, 15 March 2018, no. 17-13.187, the court examined the consequences of the articles’ treatment of heirs and the claim for the value of the shares. The lesson for a British estate is practical: obtain the executed version of the articles and any amendments, identify the exact exclusion or approval wording, and do not rely on a general statement that “the family inherits the SCI”.

Another decision illustrates why later amendments must be checked. In Cour de cassation, troisième chambre civile, 27 May 2021, no. 20-15.053, the court considered the legal effect of a clause and held that the lower court had distorted the clear terms referring to the fact that les statuts de la SCI sont modifiés. The precise facts should not be copied into every family situation, but the decision confirms the importance of reading what the articles actually say about the members, the shares and amendments after a death.

If the articles give a withdrawal right, a member may in some circumstances seek to leave the company. Article 1869 of the Civil Code addresses withdrawal under the articles, unanimous agreement or a court-authorised reason, with reimbursement of the share value under Article 1843-4. See Légifrance, Civil Code article 1869. Withdrawal is not an automatic remedy for every disappointed heir. It may require a negotiated decision or a court application, and the valuation still needs to be established.

Nor does a disagreement require the immediate dissolution of the SCI. Article 1844-9 provides for the consequences of liquidation after debts and capital have been dealt with, and recognises that succession rules can leave rights in undivided ownership. The official text is on Légifrance, Civil Code article 1844-9. A family seeking a sale of the property should distinguish a share buy-out, a withdrawal, a sale by the SCI and a liquidation. Each has different approvals, tax consequences and timing.

When the members cannot agree on approval or price, preserve the procedural evidence. Keep the date on which the death was notified, the date on which the heirs supplied documents, the date of any vote, the vote result, any refusal letter and every valuation exchanged. A refusal that is never properly notified can create a separate dispute about deadlines and enforceability. A British heir who is outside France should use a traceable channel and ensure that the French address for notices is correct.

In a contested case, the court may need to determine whether the articles were applied correctly and whether the valuation was conducted by the right person. The objective is not to force a commercial compromise at any price; it is to establish the legal route first, then obtain a defensible value. That order reduces the risk of a family paying for an interest that the articles did not permit it to receive, or of an heir accepting a price calculated on the wrong date.

II. How are French SCI shares valued and taxed in the UK and France?

A. What value and documents must be put before the French notaire?

Article 1843-4 of the Civil Code supplies the valuation framework when the value of social rights is disputed or must be fixed in the circumstances identified by law. It provides for an expert appointed by the parties or, failing agreement, by the president of the competent court. The current provision is available on Légifrance, Civil Code article 1843-4. It is not a licence for either side to choose an accountant and call the figure final. The appointment route, the mission and the documents supplied to the expert all matter.

In Cour de cassation, chambre commerciale, 30 November 2004, no. 03-15.278, the court stated that le pouvoir de désigner un expert chargé de l’évaluation des droits sociaux appartient au seul président du tribunal. That short passage is useful when a family is tempted to appoint an expert informally after negotiations fail. A private valuation can support a settlement, but it should not be confused with the statutory appointment procedure where Article 1843-4 is engaged.

The same caution appears in Cour de cassation, chambre commerciale, 13 September 2017, no. 16-12.978, which concerned the legal treatment of an expert valuation. The exact dispute will depend on the articles and the claim being made, but the recurring principle is that an expert’s mission is to apply the relevant legal and contractual valuation rules, not to redesign the parties’ rights. If the articles contain a formula, it should be identified at the outset. If no reliable formula exists, the expert must explain the chosen method and the evidence supporting it.

A proper SCI share file usually includes the following:

• the complete, signed articles and every amendment, including any approval, exclusion, pre-emption, withdrawal or continuation clause;
• the death certificate, will, family-status documents, any French acte de notoriété, and the documents establishing the heirs or legatees;
• the SCI’s latest accounts, bank statements, loan agreements, shareholder current-account balances and a schedule of unpaid taxes or charges;
• the title documents for each property, recent market evidence, leases, rental deposits, insurance, works estimates and any notice of a dispute;
• the number and class of shares held by the deceased, the paid-up capital, voting rights, usufruct or bare ownership, and any pledge or restriction;
• evidence of the property’s condition and of liabilities that a buyer would assume, including environmental, planning, building or co-ownership exposure; and
• the tax residence and nationality of the deceased and each relevant heir, because the French and UK tests are not interchangeable.

The value of the shares is not automatically the property’s advertised price multiplied by a fraction. The expert or adviser will normally start with the value of the SCI’s net assets: the market value of the property and other assets, less loans, taxes, current accounts and other liabilities. The result then has to be allocated between the shares in light of the articles, share rights, usufruct, voting arrangements and any genuine minority or illiquidity factor. A discount cannot be inserted merely because it produces a lower inheritance-tax bill. It should be supported by the actual rights and market conditions.

Valuation at the date of death is a snapshot, not a later sale price. If a roof is repaired after the death, that work may be relevant to explaining the property’s condition, but it does not automatically move the statutory valuation date. If the property market changes between the death and a later buy-out, that change may affect negotiations without changing the date required for the inheritance valuation. The file should record the date of death, the valuation date and the date on which each figure was prepared.

The company’s debts deserve particular attention. A mortgage, unpaid rent, tax arrears, a member’s current-account advance and a forthcoming major repair do not have the same legal or accounting character. The expert should not deduct a liability twice, and the notaire should not rely on a balance sheet value that ignores a material change in the property. Ask for a reconciliation from the SCI’s accounts to the valuation, so that each adjustment can be understood by both the estate and the surviving members.

The French declaration of succession has its own timetable. The official impots.gouv.fr guidance on a death states that the declaration is generally due “dans les 6 mois” when the death occurs in metropolitan France and “dans les 12 mois” when it occurs abroad. The deadline is linked to the place of death, subject to special rules, not simply to whether the deceased was British. The same official page explains when a notaire is required, including where the estate contains immovable property, a will or a qualifying estate value.

For a British family, the first call to the notaire should therefore ask four separate questions: when is the French declaration due; which office must receive it; which documents need certified translation or further formalisation; and which valuation will be reported for the shares? If the deceased lived in the UK but the SCI owns French property, the non-resident procedure may apply. If the deceased lived in France, the filing route and the domestic tax analysis may be different. A deadline should not be postponed while the family negotiates who will eventually keep the shares.

B. How do UK Inheritance Tax and the France–UK treaty prevent double taxation?

French inheritance tax begins with the French rules on taxable property and the relationship between the deceased and the beneficiary. Article 750 ter of the French Tax Code, available on Légifrance, Tax Code article 750 ter, can bring worldwide assets into the French calculation when the deceased was tax-resident in France. It can also reach French-situs assets when the deceased was not resident in France, and it contains a six-out-of-ten-year rule concerning an heir resident in France. The factual residence analysis must be done carefully; a British passport is not a tax-residence certificate.

French rates and allowances depend on the beneficiary’s relationship with the deceased and the taxable amount. Article 777 of the Tax Code sets the scale for gratuitous transfers; see Légifrance, Tax Code article 777. Previous gifts can alter the calculation. Article 784 contains the fifteen-year fiscal reporting rule for prior gifts and is available on Légifrance, Tax Code article 784. The notaire needs a reliable history of gifts, even if the transfers occurred in the United Kingdom and the family thought of them as ordinary lifetime planning.

Article 913 of the Civil Code also needs to be considered where a will or foreign succession law appears to exclude children. The provision concerning the compensatory levy for certain French assets has conditions relating to the nationality or residence of the deceased or child and the foreign law’s protection of reserved heirs. The current text is on Légifrance, Civil Code article 913. Brexit means that a British nationality cannot be treated as though it were automatically an EU nationality. The private-international-law analysis may still require a choice-of-law review, but no one should promise a French forced-heirship result without reading the will, family facts and applicable law.

The France–UK Convention on inheritance taxes dated 21 June 1963 remains central to the double-tax analysis. The official French text is published by the tax administration in this France–UK inheritance-tax convention PDF. Its Article 4 contains the treaty rules for locating different types of property. For an SCI, the text says: Pour les sociétés civiles immobilières, ce lieu est celui de la situation des immeubles. This is why a French SCI holding French buildings cannot be analysed as if it were merely a UK bank investment.

The treaty does not mean that every share of every company is taxed in the same country. It applies its classification rules to the actual asset and the residence or domicile position at death. It also contains rules about how the state of the deceased’s domicile grants a credit for tax imposed by the other state on an asset situated there. Article 6 provides for a credit, limited by the tax applicable to the same asset. Article 5 contains allocation rules where the deceased was domiciled in France or Great Britain. Read the provisions together, not as a general exemption.

The French administrative commentary explains the mechanism. The BOFiP commentary on the France–UK inheritance convention states that the elimination of double taxation combines rules locating estate assets with a credit in the state of the deceased’s domicile. It also explains that French inheritance tax for a deceased person domiciled in France continues to be calculated under French domestic law, even when the treaty treats some assets as situated in Great Britain for the other state’s tax. In other words, the treaty coordinates taxing rights; it does not remove the need for a French declaration.

The UK position changed for deaths and transfers on or after 6 April 2025. HM Revenue & Customs’ official GOV.UK guidance for a long-term UK resident says that the domicile and deemed-domicile rules were replaced by long-term UK residence rules. A person is generally long-term UK resident for a tax year if they were UK tax-resident for ten consecutive years or for at least ten of the previous twenty years. After leaving, the status can continue for up to ten tax years, with a shorter tail in some histories. The precise transitional and returning-resident rules must be checked for the date of death.

This is not a nationality test. A British citizen who has lived in France for many years is not automatically liable to UK Inheritance Tax on the whole estate merely because they hold a British passport. Conversely, leaving the UK shortly before death does not necessarily remove overseas assets from the UK charge if the long-term-residence conditions remain satisfied. The estate needs a year-by-year UK residence history, the date of departure, any later UK residence and the status of the deceased at the date of death.

The new UK residence rules must also be kept distinct from the treaty’s language about domicile. HMRC guidance has a domestic tax purpose; the treaty has its own allocation concepts. If the deceased was resident in France but remained within the UK long-term-residence tail, both administrations may need to be informed. A treaty claim is normally evidenced through the tax returns, the French succession declaration, proof of tax paid and the computation showing which asset and which tax are being matched.

A numerical example shows the order of analysis. Suppose a French SCI owns a building worth €900,000, has €300,000 of mortgage debt and has no other material asset or liability. Its provisional net value is €600,000. If the deceased owned 50% of the shares, the starting economic value is €300,000 before considering the actual share rights and evidence for any adjustment. That figure is not automatically the French taxable amount for every heir: allowances, prior gifts, the heir’s relationship, usufruct and the applicable territorial rules still have to be applied. The same €300,000 may also be examined for UK Inheritance Tax, but the UK residence test and the treaty credit then determine how the two liabilities interact.

If the surviving members buy the shares, the estate should separate the inheritance-tax value from the later payment mechanics. A buy-out agreement may specify instalments, security, interest, or a date by which the company’s accounts must be updated. Those terms do not necessarily change the date-of-death value used for succession tax. They can, however, affect cash flow, enforcement and the family’s ability to pay the French tax due before the buy-out proceeds are received.

If the heirs retain the shares, the SCI’s register, beneficial ownership information and management arrangements must be updated. The heirs should know whether they are joint owners of a block of shares, whether one person represents the indivision, whether a usufruct remains, and which decisions require a vote. A block of inherited shares can be legally valid but practically unusable if the heirs have no mechanism for speaking with one voice. Article 1844 and the articles should be reviewed before the first meeting after the death.

If the heirs disagree about the value, obtain a written valuation brief rather than exchanging unreasoned percentages. It should state the property values, debt figures, date, share rights, adjustments, comparable evidence and assumptions. If an expert appointment becomes necessary, the request should identify the legal basis and the exact question to be answered. A court-appointed expert cannot cure a missing estate document or a failure to notify the SCI correctly.

A British heir should also keep the UK file coherent. The executor or personal representative may need the French valuation, the notaire’s certificate, evidence of French tax, the SCI accounts, the treaty analysis and the date at which the shares became transferable. HMRC may ask questions about the deceased’s residence, the value of an overseas company, connected-party transfers or lifetime gifts. A French tax receipt alone will not prove that the UK calculation is correct; likewise, a UK probate value will not automatically satisfy the French notaire.

The wider French rules on transmission of company shares after a member’s death are summarised in the firm’s guide to the transmission of social rights after a member’s death. For the British desk, the relevant cross-border starting point is the existing guide to French SCI inheritance and control risks for British families; this article adds the narrower post-death valuation, treaty and UK Inheritance Tax analysis rather than repeating the general SCI overview.

Before the notaire files the declaration, the family should be able to answer the following questions in writing:

• Where was the deceased tax-resident and where did the death occur?
• What exactly do the SCI’s current articles say about death, approval, exclusion, valuation and withdrawal?
• Who inherited the shares, in what proportions, and are any shares subject to usufruct, bare ownership or indivision?
• What was the SCI’s net asset value at the date of death, and which evidence supports every adjustment?
• Was the deceased within the UK long-term-residence rules for the relevant year and any post-departure period?
• Which French declaration is due, on what date, to which tax office, and how will any UK tax be documented?
• Does the proposed solution involve admission, a buy-out, withdrawal, a sale by the SCI or liquidation?

Those answers usually reveal whether the case is an administrative succession, a valuation negotiation or a genuine dispute over the articles. They also identify the point at which advice is urgent: an approaching tax deadline, an expiring approval period, a refusal to recognise an heir, a proposed transfer at an unexplained price, or a UK filing that omits the French SCI altogether.

Conclusion

When a British shareholder dies, French SCI shares must be handled as company rights within a cross-border estate. The heirs may become members under the articles and Article 1870, or they may be excluded or refused approval and receive the value of the shares under Article 1870-1. That value is anchored to the date of death and may require the Article 1843-4 expert procedure if the parties cannot agree. The property’s market value, the SCI’s debts, the share rights and any usufruct or indivision must all be documented.

Tax analysis then proceeds on two tracks. France applies its domestic territorial and relationship rules, including Articles 750 ter, 777 and 784 of the Tax Code. The 1963 France–UK convention locates assets and coordinates credits, while the UK applies its post-6 April 2025 long-term-residence rules to determine whether overseas assets remain within Inheritance Tax. The safest file is one in which the articles, valuation, French declaration, UK residence history and treaty claim tell the same story.

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