Your family owns a house in the Dordogne, in Brittany or in the Alps. Since Brexit you live with a British passport, a French property and a growing list of questions: what happens if one of the children wants to sell, if the couple separates, or if the French tax office sends a bill you do not understand? For many British families the answer chosen by their French notaire (a public officer who authenticates conveyances and successions) is a family SCI. An SCI, or société civile immobilière, is a non-trading civil property company whose only job is to own and manage one or more buildings. The family members hold shares (parts sociales) instead of owning bricks directly, and the company’s statutes organise who decides, who pays and who inherits.
This guide explains, for a British reader, how a family SCI is set up and run from the United Kingdom, what happens when a member wants to leave or the family quarrels, how the French tax system treats the SCI, and how the shares pass to the next generation. Brexit did not change French company law, and a British national may form and hold shares in an SCI exactly as before. What Brexit did change is the surrounding context: you are now a third-country national for residence purposes, your worldwide estate may straddle two legal systems, and every French legal term needs to be understood before it is signed. Where the administration or a co-associate blocks you — a refused withdrawal, a disputed share valuation, an unexpected tax assessment — French law provides routes to challenge the decision, and this article shows you where they start.
I. Should a British family put its French house in a family SCI after Brexit?
A. How do you set up and run a family SCI while living in the United Kingdom?
A company begins with a contract. Article 1832 of the Civil Code states: “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: two or more people agree to put assets or work into a shared venture in order to share the profit or benefit from the resulting saving. A family SCI is that contract applied to a house: typically two parents, or parents and children, contribute the property or the cash that buys it, and receive shares in return. French nationality or residence is not required. There is no minimum capital, and a British couple living in Kent can form an SCI that owns a cottage in the Lot just as lawfully as a family living in Lyon.
The SCI has what lawyers call civil character. Article 1845 of the Civil Code provides: “Les dispositions du présent chapitre sont applicables à toutes les sociétés civiles, à moins qu’il n’y soit dérogé par le statut légal particulier auquel certaines d’entre elles sont assujetties. Ont le caractère civil toutes les sociétés auxquelles la loi n’attribue pas un autre caractère à raison de leur forme, de leur nature, ou de leur objet.” The practical meaning matters: an SCI must remain a management vehicle. It may buy, hold, let unfurnished and borrow, but it must not run a commercial trade. Short-term furnished holiday letting pushed too far can be reclassified as commercial activity, with tax consequences examined in Part II. The official business guidance page describes the permitted scope and the formation steps in detail (see the service-public.fr page on the SCI), and the French tax administration summarises the tax position in its impots.gouv.fr guide to the SCI.
Formation follows a fixed sequence. First, the associates draft the statutes (statuts), the written constitution of the company: name, registered office (siège social), purpose (objet social), capital, shares, manager, decision rules, approval clauses and exit rules. For a British family this document is the single most important piece of paper in the whole structure, because nearly every later dispute turns on what the statutes do or do not say. Second, the contributions are made: cash paid into a blocked bank account, or the house itself contributed by deed before a notaire. Third, the SCI is registered with the trade and companies register (registre du commerce et des sociétés) through the online single counter (guichet unique), and a legal notice is published. Only once registered does the SCI exist as a legal person that can hold title, borrow and sue.
Day-to-day power sits with the manager, the gérant. Article 1846 of the Civil Code states: “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.” The company is managed by one or more people, associates or not, appointed by the statutes, by a separate deed or by a decision of the associates. In a family SCI the father, the mother or both are usually appointed, often for an unlimited term. The manager signs the insurance, pays the taxe foncière (the French local property tax on owners), commissions the roofer and represents the SCI before the bank. Major choices — selling the house, borrowing, admitting a newcomer — belong to the collective decisions of the associates, taken at the majorities the statutes fix. Keep minutes (procès-verbaux) of every meeting, even when the meeting is a video call between Manchester and Montpellier: written records are what proves a decision was regular when a bank, the tax office or a dissenting sibling challenges it years later.
Three Brexit-specific practical points deserve attention at this stage. First, French banks have tightened identity and anti-money-laundering checks for non-resident clients, so opening the SCI’s account from the UK takes longer and demands certified translations; start early and keep every certificate. Second, the registered office must be in France, commonly at the property itself or at the notaire’s or accountant’s office, because official mail still travels on paper. Third, the SCI does not grant any right to live in France: shareholders who visit remain subject to the 90-days-in-180 rule, and anyone moving permanently still needs the appropriate long-stay visa and residence permit. The company owns walls; it does not issue visas.
B. What happens when a family member wants out, or when the family falls out?
Children grow up, couples separate, siblings disagree about selling. Direct co-ownership (indivision, where each person owns an undivided share of the whole) answers these moments badly: any co-owner can force a sale at auction. The SCI exists precisely to replace that fragility with procedure. The first safety valve is withdrawal, the retrait. Article 1869 of the Civil Code 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. Ce retrait peut également être autorisé pour justes motifs par une décision de justice. 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.” An associate may therefore withdraw wholly or partly on the conditions set by the statutes, or failing that with the unanimous consent of the others, or for good reason with a judge’s permission, and is entitled to repayment of the value of the shares, fixed by expert valuation if no agreement is reached.
A very recent ruling of the Cour de cassation, France’s supreme court for civil matters, shows why the statutes matter more than anything else. On 24 September 2026 the Third Civil Chamber, in pourvoi no. 24-17.185, quashed an appeal judgment that had refused repayment to withdrawing members of a family property company. The Court recalled the classic rule that a withdrawing associate normally keeps that status until the value of the shares is repaid, then held: “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.” The rule is only a default that fills gaps in the associates’ wishes, and the statutes may lawfully provide otherwise. For a British family the lesson is direct: write into the statutes when withdrawal takes effect, how the shares are valued, who pays, and within what time. Ten years earlier the same chamber had already enforced Article 1869 strictly against a property company that resisted a member’s departure (see Cass. 3rd civ., 29 September 2016, no. 15-18.396). Where the statutes are silent and the remaining members refuse consent, the blocked associate may ask the court (tribunal judiciaire) to authorise withdrawal for good reason, and a refusal can be appealed.
Valuation is where most exits turn bitter. The departing member believes the Dordogne cottage has soared in value; those who stay plead for a discount for a quick family deal. Article 1869 answers by pointing to expert valuation where no friendly agreement exists, and French courts appoint an independent expert whose report the judge then reviews. A British associate who considers the expert’s figure unfair is not without remedy: the valuation can be contested before the court for methodological error, overlooked liabilities or a wrong reference date. Never sign a receipt “in full settlement” before independent advice if you intend to challenge the figure.
When the quarrel goes beyond one departure and paralyses the whole company, the ultimate remedy is early dissolution ordered by a judge. Article 1844-7, 5° of the Civil Code provides that a company ends “Par la dissolution anticipée prononcée par le tribunal à la demande d’un associé pour justes motifs, notamment en cas d’inexécution de ses obligations par un associé, ou de mésentente entre associés paralysant le fonctionnement de la société” — by early dissolution ordered by the court at the request of an associate for good reason, particularly where an associate fails to perform duties or where disagreement between associates paralyses the operation of the company. The Cour de cassation interprets this strictly. In a family property company formed by a cohabiting couple, the Third Civil Chamber held that disagreement and the resulting loss of mutual trust (affectio societatis, the shared will to work together) justify dissolution only if they paralyse the company’s functioning: “la mésentente existant entre les associés et par suite la disparition de l’affectio societatis ne pouvaient constituer un juste motif de dissolution qu’à la condition de se traduire par une paralysie du fonctionnement de la société” (see Cass. 3rd civ., 16 March 2011, no. 10-15.459). Mere resentment is therefore not enough; blocked accounts, unheld meetings, a manager who cannot act, or two equal halves vetoing each other are the facts a judge looks for. Dissolution leads to liquidation: the house is sold or allocated, debts paid, and the remainder shared. Because dissolution destroys the vehicle the family built to avoid a forced sale, treat it as the last resort after mediation or a negotiated buyout.
Two drafting precautions prevent most of these disputes. First, an approval clause (clause d’agrément): most family statutes require the consent of the other associates before shares can be transferred to an outsider, so a divorcing spouse or an heir cannot simply sell the family home’s shares to a stranger. Second, a clear rule for the death of an associate: the statutes choose whether heirs automatically become associates or only receive the value of the shares. Article 1870-1 of the Civil Code states: “Les héritiers ou légataires qui ne deviennent pas associés n’ont droit qu’à la valeur des parts sociales de leur auteur. Cette valeur doit leur être payée par les nouveaux titulaires des parts ou par la société elle-même si celle-ci les a rachetées en vue de leur annulation. La valeur de ces droits sociaux est déterminée au jour du décès dans les conditions prévues à l’article 1843-4.” Heirs who do not become associates are entitled only to the value of the deceased’s shares, payable by the new holders or by the company itself, assessed at the date of death. British parents who want the survivor to keep control should therefore provide expressly that the surviving spouse becomes or remains associate, rather than leaving the question to default rules and grieving children.
II. How is a British-owned SCI taxed in France, and how do the shares pass to your children?
A. Income tax or corporation tax: which regime applies to your SCI, and how do you challenge the bill?
The default tax treatment of a family SCI surprises many British owners, because it is transparent. A company that only manages its own property is not taxed itself; each associate is taxed personally on a share of the rents and may deduct a share of the interest, insurance, management fees and local taxes. The mechanism sits in the General Tax Code (Code général des impôts). Article 8 of the General Tax Code taxes members of partnerships and similar entities personally on their share of profits where the entity has not elected for corporation tax. Article 1655 ter of the General Tax Code confirms that companies whose real and sole purpose is the construction or acquisition of buildings, or groups of buildings, with a view to dividing them by shares among the associates, fall under this transparency. Each UK-resident associate declares the French rental share on a French return (form 2044 for unfurnished rental income, within the 2042 family), even where the rent was paid into a British account: the building is in France, so France taxes first.
An SCI may instead elect for corporation tax (impôt sur les sociétés). Article 206 of the General Tax Code lists the companies liable to that tax, and partnerships that so elect join them. The election is irrevocable after five years and changes everything: the company pays tax on its profit at the corporate rate, depreciation (amortissement) of the building becomes deductible, but later distributions are taxed again in the associates’ hands and a sale of the building is taxed on the full gain without the generous personal allowances described below. For a family that simply lives in the house or lets it unfurnished, election is usually a mistake; for a family running a genuine portfolio of lettings with leverage, it can be rational. Because the choice binds the future, model both paths with an accountant before signing the option, and remember that furnished holiday letting inside a transparent SCI risks reclassification of the whole structure.
Capital gains (plus-values) follow which asset is sold. If the SCI sells the house, the gain is computed under the private individual regime: Article 150 U of the General Tax Code taxes gains realised by individuals on the sale of buildings or of rights relating to buildings, with relief that grows with years of ownership until full exemption after long holding. If instead a parent sells or gives SCI shares, the gain on the shares follows the securities logic, generally less favourable for long-held homes. Non-residence adds a layer: Article 244 bis A of the General Tax Code taxes, subject to international treaties, gains realised by non-resident persons and bodies on French buildings, and appoints a fiscal representative (représentant fiscal) in certain cases. British sellers therefore need a French capital-gains computation even where the proceeds land in Leeds, and the France–United Kingdom double tax treaty allocates the taxing right over immovable property to the state where the property sits, with a credit mechanism at home. A bill that ignores holding-period relief, renovation costs or treaty credit should be challenged by formal claim (réclamation) within the statutory time limit, then before the court with jurisdiction over the tax concerned.
Practical compliance keeps the SCI invisible to the authorities in the best sense. File the annual transparency return (form 2072) even in a year with no rent; declare each associate’s share where they are resident for tax; keep loan offers, invoices for works and council-tax bills for the gain computation of a future sale. Where the tax office reassesses — reclassified furnished income, denied charges, late-filing penalties — the assessment notice itself states the appeal routes and deadlines. Act inside them: a late challenge fails however strong the merits.
B. How do SCI shares pass to your children after Brexit, and what of forced heirship?
Shares in an SCI are movable property (biens meubles), even though the company’s only asset is a house. That classification shapes succession: what the children inherit is not the cottage but a number of shares, valued at the date of death under the expert procedure already mentioned. Where the statutes say heirs do not automatically become associates, the children receive that value in money, paid by the new holders or by the company, as Article 1870-1 of the Civil Code quoted above provides. Where the statutes admit them, they step into the company and co-decide with the survivor. British parents should align three documents: the statutes, their wills, and any gifts already made, so the three do not contradict each other on the morning of the succession.
France protects children through the reserved share, the réserve héréditaire. Article 912 of the Civil Code defines it: “La réserve héréditaire est la part des biens et droits successoraux dont la loi assure la dévolution libre de charges à certains héritiers dits réservataires, s’ils sont appelés à la succession et s’ils l’acceptent. La quotité disponible est la part des biens et droits successoraux qui n’est pas réservée par la loi et dont le défunt a pu disposer librement par des libéralités.” The reserved portion belongs to the children free of charges; only the disposable portion (quotité disponible) can be given freely by gift or will. Article 913 of the Civil Code fixes the fractions: “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 ; le tiers, s’il laisse deux enfants ; le quart, s’il en laisse trois ou un plus grand nombre.” Gifts and legacies may not exceed one half with one child, one third with two, one quarter with three or more. English freedom of testation therefore stops at the Channel for the French part of the estate unless planning neutralises it. The standard tool is a choice of English law in the will under the EU Succession Regulation, which France applies, combined with lifetime gifts of shares, division of ownership between usufruct (usufruit, the right to use and take income) and bare ownership (nue-propriété), and where suitable a family SCI whose statutes organise control. Each device interacts with the others, which is why a will drafted in England without reference to the SCI statutes regularly produces the litigation it was meant to prevent. Our companion guide to choosing English law for a French house and protecting the children examines the will side of this planning in detail.
French inheritance and gift tax (droits de mutation à titre gratuit) then applies to the transmission of the shares. Article 777 of the General Tax Code sets the progressive rates by family link for each beneficiary’s net share, and Article 779 of the General Tax Code grants the well-known allowance: “Pour la perception des droits de mutation à titre gratuit, il est effectué un abattement de 100 000 € sur la part de chacun des ascendants et sur la part de chacun des enfants vivants ou représentés.” Each child currently enjoys a 100,000-euro tax-free allowance on what each parent transmits, renewable every fifteen years, which is why British parents often give shares progressively rather than all at once. The gift must be declared and registered within one month, and the valuation of the shares — commonly discounted for minority holdings or for the occupant’s rights — is the figure the tax office scrutinises first. A reassessment that rejects a documented discount without reasons, or that taxes as French-resident a beneficiary the treaty assigns elsewhere, can be disputed through the same claim-then-court path as income-tax bills. Keep the gift deeds, the valuation reports and the proof of filing: successions are settled on paper, and the paper that wins is the paper kept.
Conclusion
A family SCI remains, after Brexit, the most orderly way for a British family to hold a French house across generations: shares instead of deadlock, statutes instead of improvisation, transparency instead of double structures. Its strength is procedural — written rules for entry, management, exit and death — and its weakness is the same: a badly drafted statute, an unfiled return or a will that ignores the company turns the shield into a trap. Draft the statutes for the worst day, not the best; file every year even when nothing happened; align wills, gifts and statutes before a death forces the issue. And where the machinery jams — a refused withdrawal, a contested valuation, a paralysed company, a tax bill that disregards relief or treaty rights — French law offers a judge and a procedure for each blockage, provided the challenge is raised in time and on evidence prepared from the start.