Many British families who own a house in France hold it through a société civile immobilière, usually shortened to SCI and pronounced “ess-see-ee”. A société civile immobilière is a French non-trading property company: the family home belongs to the company, and each family member owns a slice of the company, called parts sociales (company shares), instead of owning bricks and mortar directly. Couples from London, Manchester or Edinburgh set one up to avoid the rigid French co-ownership regime known as indivision, to organise who decides what, and to plan what happens when one of them dies. Brexit has not changed the French company or succession rules themselves, but British shareholders are now third-country nationals in France, so every residence, tax and estate question sits inside a cross-border frame: French law governs the company and the French house, while British tax and an English will may still pull from the other side of the Channel. This guide explains, for a British reader, how the shares work while everyone is alive, how they pass on death or by lifetime gift, which French taxes bite at each step, and where a wrong calm or a wrong bill can be challenged. Part I describes the vehicle and its day-to-day control. Part II follows the shares through death and gifts, including the protection of the surviving spouse.

I. Holding a French home through an SCI: what changes for a British family after Brexit

A. What is an SCI and how are its shares taxed while the family owns the house?

A société civile immobilière (SCI) is a civil company whose purpose is to buy, hold or manage property. The Civil Code defines the starting point for every French company: “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.” Two or more people therefore sign statuts (articles of association), contribute money or the house itself, and receive parts sociales in return. The official service-public guidance confirms the practical side: the amount of the share capital is freely set by the shareholders, with one euro as the minimum, and contributions can be cash or property in kind. The company is then registered and gains a legal personality distinct from its members, with its own name, registered office and assets. For a British couple, that separation is the whole point: neither spouse owns the Dordogne farmhouse directly, the company does, and each spouse owns shares carrying votes and a slice of the income.

The separation has a sharp edge on liability. The same official guidance states that the liability of SCI shareholders for company debts is simultaneously indéfinie (unlimited), non-solidaire (not joint and several) and subsidiaire (subsidiary, meaning creditors must first pursue the company). In plain terms, if the SCI cannot pay a builder, a bank or the tax office, each shareholder can be pursued on personal assets in proportion to that shareholder’s stake, even without any personal fault. British buyers accustomed to the limited liability of an English private limited company should register this difference: an SCI protects against indivision deadlock, not against creditors.

For income tax, the default regime is transparency. Article 1655 ter of the General Tax Code provides 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”, and that each shareholder is personally liable for income tax on the share of the company’s profits matching that shareholder’s rights. Rents from an unfurnished letting therefore flow straight into each British-resident shareholder’s French income tax return in proportion to the shares held, whether or not the company actually distributes the cash. The statute itself contemplates that a shareholder may instead fall under corporation tax in some configurations, which is a reminder that electing for company taxation, or drifting into a commercial activity such as furnished letting, changes the entire picture and needs separate advice before anything is signed.

Selling the shares is not taxed like selling the house. When the company’s assets consist mainly of French property or French property rights, a transfer of its shares bears registration duty at a specific rate: the Tax Code imposes “A 5 % : – pour les cessions de participations dans des personnes morales à prépondérance immobilière.” A British family that sells its shares to the next British buyer therefore faces a 5 per cent duty on the price, with only a small allowance mechanism, whereas keeping the shares and passing them down the generations triggers the gift and succession duties described in Part II. The choice between selling the building out of the company and selling the shares of the company is consequently a tax decision as much as a conveyancing one.

The British side of the Channel does not disappear. British guidance on deaths abroad explains that a person based abroad pays Inheritance Tax on that person’s UK assets, such as British property or bank accounts (HMRC guidance on Inheritance Tax when someone living outside the UK dies) That starting point helps British families living in France understand why France taxes the French house and its shares while Britain looks principally at British assets, but domicile can extend the British charge to worldwide assets, so the two systems must be mapped together rather than assumed to divide neatly. The France-United Kingdom double tax treaty then allocates taxing rights over income and gains, while French law alone governs who inherits the shares and how.

B. Who votes and who receives the income when ownership is split between parents and children?

Many British parents split ownership of the shares within their own lifetime: they keep the usufruit (usufruct, the right to use the property and take its income) and give the nue-propriété (bare ownership, ownership stripped of use and income until the usufruct ends) to their children. The Civil Code defines the usufruct in one sentence: “L’usufruit est le droit de jouir des choses dont un autre a la propriété, comme le propriétaire lui-même, mais à la charge d’en conserver la substance.” Applied to SCI shares, the parent who holds the usufruct lives in the house or receives the rents, while the child who holds the bare ownership waits to become full owner when the usufruct ends, usually on the parent’s death. Explaining these two words matters because every later rule, vote and tax calculation turns on them.

Voting follows a default set by statute, which the statuts can adjust only within limits. Article 1844 of the Civil Code states the default plainly: “Si une part est grevée d’un usufruit, le nu-propriétaire et l’usufruitier ont le droit de participer aux décisions collectives. Le droit de vote appartient au nu-propriétaire, sauf pour les décisions concernant l’affectation des bénéfices, où il est réservé à l’usufruitier.” The same article adds that for other decisions the bare owner and the usufructuary may agree that the vote will be exercised by the usufructuary. In a typical British family SCI, the children who hold bare ownership therefore vote on most company decisions, while the parent who holds the usufruct votes on what happens to the profits, such as whether rents are distributed or kept in the company for roof repairs. Families that want a different balance must write it into the statuts at the outset, because the default applies the moment nobody has agreed otherwise.

The courts have tightened what the statuts may and may not do to the usufructuary. In a widely followed 2022 ruling, the Third Civil Chamber of the Court of Cassation held that “l’usufruitier de parts sociales ne peut se voir reconnaître la qualité d’associé, qui n’appartient qu’au nu-propriétaire, mais qu’il doit pouvoir provoquer une délibération des associés sur une question susceptible d’avoir une incidence directe sur son droit de jouissance.” Two years later, the same chamber quashed an appeal ruling that had enforced a statutory clause barring usufructuaries from challenging any company resolution, holding that “ils ne peuvent, en revanche, priver l’usufruitier de parts sociales du droit de contester une délibération collective susceptible d’avoir une incidence directe sur son droit de jouissance.” For a British mother who kept the usufruct of the shares over the family house in Uzès, the message is concrete: she is not a shareholder, she cannot vote as one, but no clause in the company’s paperwork can stop her forcing a meeting, or challenging in court a resolution that directly threatens her right to live in the house or receive its rents, such as a sale of the building or a capital increase diluting the shares.

Day-to-day control therefore depends on three documents read together: the statuts, the minutes of each assemblée générale (general meeting), and the manager’s reports. The gérant, the appointed manager of the SCI, runs the company, signs the letting agreement, pays the taxe foncière from company funds and calls the meetings. British shareholders who live most of the year in Kent and visit the house in August should insist on written minutes for every decision, because minutes are the evidence a court or the tax office will read if a resolution or a bill is later challenged. Where a resolution looks irregular, the usufructuary’s court action to annul it must target a decision with a direct impact on the usufruct; a complaint about general management, without that link, will be declared inadmissible, exactly as the Bordeaux appeal court correctly did in the case the Court of Cassation reviewed in 2022.

II. Passing on SCI shares on death or by gift: protecting the survivor and paying the right tax

A. What happens to the shares when a British shareholder dies?

Death does not dissolve the company. Article 1870 of the Civil Code provides: “La société n’est pas dissoute par le décès d’un associé, mais continue avec ses héritiers ou légataires, sauf à prévoir dans les statuts qu’ils doivent être agréés par les associés.” The agrément clause, the approval mechanism, is the pivot of every British family SCI. Where the statuts require approval, the surviving shareholders vote on whether each heir or legatee joins the company; where they are silent on the procedure, approval falls back to the unanimous agreement of the existing shareholders. A British husband and wife who are the only two shareholders should therefore check what their own statuts say about the other’s children from a first marriage, because an unapproved child does not become a shareholder at all.

An heir who never becomes a shareholder owns an economic claim, not a seat at the table. Article 1870-1 states: “Les héritiers ou légataires qui ne deviennent pas associés n’ont droit qu’à la valeur des parts sociales de leur auteur.” The value must be paid either by the people who take the shares or by the company itself where it has bought the shares back for cancellation, and it is assessed at the date of death under the expert valuation procedure of article 1843-4. The Court of Cassation drew the full consequence in a 2020 decision concerning a family SCI: “Selon l’article 1870, alinéa 1, du code civil, la société civile n’est pas dissoute par le décès d’un associé, mais continue avec ses héritiers ou légataires, sauf à prévoir dans les statuts qu’ils doivent être agréés par les associés”; “L’article 1870-1 du même code prévoit que les héritiers ou légataires qui ne deviennent pas associés n’ont droit qu’à la valeur des parts sociales de leur auteur”; and therefore “Il en résulte que, s’il n’est associé, l’héritier n’a pas qualité pour percevoir les dividendes, fût-ce avant la délivrance du legs de ces parts à un légataire.” In that case the heir, never approved as a shareholder, was refused the rents the company had distributed after collecting them, even for the period between the death and the handover of a specific legacy of shares. For a British family, the arithmetic is stark: if the surviving spouse is already a shareholder, the rents voted after the death go to the shareholders; a child who is still waiting for approval receives the appraised value of the shares instead, not the income stream.

The buyback route itself has a tax advantage the tax office once tried to deny. Company statuts often provide that on death the company continues among the survivors, with the deceased’s rights transferred to the survivors or to the company where the shareholders decide to buy the shares back and cancel them against payment of the price to the deceased’s beneficiaries. The Commercial Chamber held in 2013 that such an operation “ne pouvait recevoir légalement la qualification de cession de parts sociales”, so the 5 per cent registration duty on transfers of shares in property-heavy entities did not apply to the assignment of the claim representing the value of the deceased shareholder’s rights. Families should still expect the underlying valuation to be contested, because the price paid to the heirs must reflect the real worth of the shares at death, and the notaire settling the succession will verify the company’s accounts, the property valuation and the loan position before any figure is accepted.

Refusals of approval and disputed valuations are both challengeable, but only through the procedure the statuts and the statute organise. An heir who is refused approval can contest the regularity of the vote, the calculation of the buyout value and the expert process; a shareholder who considers that a meeting was convened to sideline the deceased’s family can seek annulment of the resolutions. Because the default approval rule operates by unanimous agreement where the statuts say nothing, British families that leave the clause blank hand every surviving shareholder a veto, which is precisely why the clause should be drafted, reviewed and, where needed, updated long before a death makes it urgent. Where the deceased chose English law for the succession in an English will, a route examined in depth in our guide to choosing English law for a French house, keeping children protected and challenging a blocked succession, the shares, as movable assets, follow the designated law for succession purposes, while the company’s internal rules on approval continue to decide who sits at the table.

B. How can British parents give SCI shares to children or protect a surviving spouse?

Gifts of shares during the parents’ lifetime must pass through a French notaire. Article 931 of the Civil Code is categorical: “Tous actes portant donation entre vifs seront passés devant notaires dans la forme ordinaire des contrats ; et il en restera minute, sous peine de nullité.” A British couple cannot validly give SCI shares to their children by an English deed, a letter or a handshake at the kitchen table in Surrey; only the notarial deed counts, and the notaire also checks the agrément clause, because some statuts require the company’s approval even for gifts to children. The deed states who gives what to whom, whether the gift is an advance on inheritance or an extra share, and whether the parents keep the usufruct.

Keeping the usufruct while giving the bare ownership is the standard technique, and the tax follows a statutory scale. For registration and land-publicity duties, the value of the bare ownership and of the usufruct is set as a fraction of the full ownership value under a statutory scale, which runs from 90 per cent usufruct and 10 per cent bare ownership for a usufructuary under twenty-one, down to 10 per cent usufruct and 90 per cent bare ownership beyond ninety-one. The younger the parent who keeps the usufruct, the smaller the taxable bare-ownership value the children receive, which is why gifts are often made early. Each parent can then apply the personal allowance: the Tax Code grants “un abattement de 100 000 € sur la part de chacun des ascendants et sur la part de chacun des enfants vivants ou représentés par suite de prédécès ou de renonciation.” A British couple with two children can therefore transmit, over time and within the allowances, a large part of the bare ownership of the shares with little or no gift duty, while continuing to live in the house and vote on the profits as usufructuaries.

The children’s réserve héréditaire (reserved share) frames every gift. The Civil Code defines it as “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.” The disposable balance, the quotité disponible, is whatever the deceased could freely give: “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”, falling to one third with two children and one quarter with three or more. Gifts of SCI shares that push past that boundary are not void, but the reserved heir can bring a court action for reduction, and the same article organises a safety net where foreign law gives children no reserved-share protection at all: “chaque enfant ou ses héritiers ou ses ayants cause peuvent effectuer un prélèvement compensatoire sur les biens existants situés en France au jour du décès”, so as to restore the French reserved rights within their limits. A British testator who chooses English law for full testamentary freedom should understand this clawback on the French assets before signing anything.

The reduction action itself follows a measured procedure. Only the reserved heirs, their heirs or successors can demand it, and the action is subject to a five-year limitation running from the opening of the succession, or two years from the day the heirs learned of the infringement, never beyond ten years from the death, as article 921 of the Civil Code states: “Le délai de prescription de l’action en réduction est fixé à cinq ans à compter de l’ouverture de la succession, ou à deux ans à compter du jour où les héritiers ont eu connaissance de l’atteinte portée à leur réserve, sans jamais pouvoir excéder dix ans à compter du décès.” The court rebuilds a fictional mass of all assets at death plus past gifts under article 922, which directs that “La réduction se détermine en formant une masse de tous les biens existant au décès du donateur ou testateur.” Because the starting point of each period and the composition of the mass decide the outcome, any family told that gifts are “too late to challenge” or “automatically safe” should have the notice, the dates and the calculation checked against these texts rather than accepted on assertion.

The surviving spouse has dedicated protection that operates inside or alongside the SCI. Where the deceased leaves children, article 1094-1 of the Civil Code allows a spouse to take, at the deceased’s choice, “soit d’un quart de ses biens en propriété et des trois autres quarts en usufruit, soit encore de la totalité de ses biens en usufruit seulement”, alongside the ordinary disposable share. In practice the British surviving wife who already holds half the SCI shares may also receive the usufruct of the husband’s shares, letting her stay in the house and receive its income for life while the children hold the bare ownership and the votes that go with it, subject to the usufructuary safeguards described in Part I. The combination of a well-drafted agrément clause admitting the spouse, a gift of the disposable portion between spouses during life, and a usufruct over the rest is the standard architecture; each element must be written into the statuts, the marriage regime and the will consistently, because a contradiction between the three is where successions stall and where court actions begin. Every assessment that follows, whether gift duty after a notarial deed or succession duty after a death, should be kept with its receipt and its stated remedies, so that any error in the base, the allowance or the rate can be challenged with the documents in hand.

Conclusion

A French SCI gives a British family holding a house in France something English co-ownership cannot: a company with shares that can be split, voted, gifted and inherited separately from the walls themselves. The price of that flexibility is discipline. The statuts must say who joins on death and who votes on what; the usufructuary who lives in the house is protected by statute and by the Court of Cassation even where the paperwork tries to silence that voice; the heir who never becomes a shareholder receives the appraised value of the shares, never the dividends; lifetime gifts pass through the notaire, taxed on the bare-ownership scale with a 100,000 euro allowance per parent per child; and the children’s reserved share, with its compensatory levy on French assets and its five-year court action, caps what even the freest English will can do to a French house. Families that align the company paperwork, the marriage regime, the will and the tax filings before a crisis keep the house, the income and the votes where they intended them to be.