{"id":2097288,"date":"2026-08-18T15:00:01","date_gmt":"2026-08-18T13:00:01","guid":{"rendered":"https:\/\/kohenavocats.fr\/2026\/08\/18\/french-sci-british-family-inheritance-control-exit-risks\/"},"modified":"2026-08-18T15:01:16","modified_gmt":"2026-08-18T13:01:16","slug":"french-sci-british-family-inheritance-control-exit-risks","status":"publish","type":"post","link":"https:\/\/kohenavocats.fr\/en\/2026\/08\/18\/french-sci-british-family-inheritance-control-exit-risks\/","title":{"rendered":"Should British Families Use a French SCI? Inheritance, Control and Exit Risks After Brexit"},"content":{"rendered":"

For a British family settling in France, a soci\u00e9t\u00e9 civile immobili\u00e8re<\/em> (SCI) can look like a neat answer to a difficult question: how should a home or a small family property portfolio be owned, managed and passed to the next generation after Brexit? An SCI is a French civil property-holding company. The family owns shares in it, while the SCI owns the property. That separation can make management easier, but it does not turn a French estate into a purely British one, remove French succession rules or make UK tax disappear.<\/p>\n

The decision is therefore not \u201cSCI or no SCI\u201d in the abstract. It is whether the proposed articles of association, share ownership, wills, tax residence and exit rules work together for this particular family. A British couple with adult children, a surviving spouse, a UK will and a French residence may face a very different result from a family with minor children, a blended family or one member remaining UK-resident. This guide examines the legal mechanics and the points at which a seemingly protective structure can create a dispute. It does not cover the property purchase process itself, which is a separate conveyancing question.<\/p>\n

I. Should a British family use a French SCI to hold and transmit French property?<\/h2>\n

A. What does a French soci\u00e9t\u00e9 civile immobili\u00e8re actually change after Brexit?<\/h3>\n

A French SCI is a civil company with its own legal personality. The starting point is Article 1845 of the French Civil Code<\/a>, which states that \u201cOnt le caract\u00e8re civil toutes les soci\u00e9t\u00e9s auxquelles la loi n’attribue pas un autre caract\u00e8re\u201d. In practical terms, the SCI, rather than each family member personally, holds the French property. Each family member holds shares. The person who runs the SCI is the g\u00e9rant<\/em>, meaning the manager. The written articles of association, or statuts<\/em>, organise voting, transfers, management powers and the consequences of death.<\/p>\n

This is different from direct co-ownership, known in France as indivision<\/em>. In an indivision, the legal relationship is attached directly to the property. In an SCI, the property remains owned by the company and the family dispute is often expressed through shares, voting rights or the appointment of a manager. That may be useful where the family wants one person to deal with repairs, insurance, letting, accounts and tax filings. It may also allow a gradual transfer of shares rather than a single transfer of the entire property. Those advantages are organisational, not magical: they depend on carefully drafted articles and on the family actually following its corporate formalities.<\/p>\n

The SCI is not a substitute for a commercial company and it should not be treated as a shortcut for a property business. A family SCI usually has a civil purpose, such as holding and managing property. If furnished letting, repeated transactions or other commercial activity becomes central, the tax and legal analysis can change. The official Service-Public explanation of the French SCI<\/a> describes the structure as requiring at least two associates, with a manager responsible for day-to-day administration. The point for a British family is that \u201cassociate\u201d in this context means a shareholder in the French civil company, not a member of a UK partnership.<\/p>\n

Brexit does not prevent British nationals from holding SCI shares or serving as a manager. It does, however, increase the number of questions that must be answered. Where does each person live for tax purposes? Which country\u2019s succession law is intended to govern the estate? Is the relevant will an English, Welsh, Scottish, Northern Irish or French instrument? Are the children minors? Is one child meant to have the home while another receives cash? Does the family expect the property to remain in the family, or may a shareholder need to sell quickly? Those questions should be answered before the shares are allocated, not after a death or relationship breakdown.<\/p>\n

Ownership through an SCI may also alter the family\u2019s practical evidence trail. A British bank, pension provider, insurer, probate registry or tax authority may ask why the deceased owned company shares rather than a French property. The family may need the current statuts<\/em>, share register, transfer deeds, annual accounts, valuation evidence, loan documents and proof of each shareholder\u2019s tax residence. An SCI with outdated records is not a protective structure; it is an additional layer of facts that must be reconstructed under pressure.<\/p>\n

Management powers must be read with particular care. The general rule in Articles 1848 and 1849 of the French Civil Code<\/a> distinguishes the manager\u2019s powers within the company from the company\u2019s relationship with third parties. The manager can carry out acts of management required by the company\u2019s interest, while the company is bound towards third parties by acts falling within its corporate purpose. The articles should therefore say what requires a prior shareholder vote: a sale, a mortgage, a long lease, a major renovation, a change of use, a loan to a family member or a move into furnished letting.<\/p>\n

A British family should ask a simple question about every proposed clause: does it deal with the actual event that could happen? A clause saying that the manager has broad powers may be sensible for routine administration, but it will not by itself resolve a disagreement about selling the family home. A clause requiring unanimity for every decision may protect minority shareholders, but it can also freeze the SCI if one shareholder becomes unreachable or refuses to cooperate. A clause allowing a majority decision may keep the property moving, but can leave a minority shareholder feeling trapped. The right balance depends on the family\u2019s finances, relationships and intended exit plan.<\/p>\n

B. Does an SCI protect children, the survivor and the family home?<\/h3>\n

An SCI can make succession more orderly, but it does not allow a family to contract out of every mandatory rule. French succession law recognises a r\u00e9serve h\u00e9r\u00e9ditaire<\/em>, or reserved share. Article 912 of the French Civil Code<\/a> defines it as \u201cLa r\u00e9serve h\u00e9r\u00e9ditaire est la part des biens et droits successoraux dont la loi assure la d\u00e9volution libre de charges \u00e0 certains h\u00e9ritiers dits r\u00e9servataires\u201d. The same article defines the quotit\u00e9 disponible<\/em>, or disposable portion, as the part that the deceased may give away freely. The existence and size of the reserve depend on the applicable succession law and the family composition; they are not determined simply by the fact that the asset is represented by SCI shares.<\/p>\n

Where French law applies to the succession, Article 913 of the French Civil Code<\/a> provides, in the words of the legislation, that \u201cLes lib\u00e9ralit\u00e9s, soit par actes entre vifs, soit par testament, ne pourront exc\u00e9der la moiti\u00e9 des biens du disposant, s’il ne laisse \u00e0 son d\u00e9c\u00e8s qu’un enfant\u201d. The percentages change where there are two or more children. A British family must not assume that putting the home into an SCI automatically makes it possible to give the whole value to one child, the surviving partner or a second marriage. A transfer may be challenged, a gift may be brought into the accounting of the estate, and a will may require reduction if the reserved rights are affected.<\/p>\n

Brexit makes the conflict-of-laws analysis more important. The United Kingdom is not a participating state in the EU Succession Regulation, and a British family may have a will governed by a UK legal system while owning a French SCI. The question is not simply whether the family has an English will. It is which law governs the succession, whether a valid choice of law was made, how the French asset or shares are characterised, and which courts have jurisdiction. The First Civil Chamber judgment of 18 November 2020, no. 19-15.438<\/a>, concerned a French national who had lived in the United Kingdom, an English will and a French SCI. In its reasoning, the Court referred to the EU regulation \u201cauquel le Royaume-Uni n’est pas partie\u201d and asked the Court of Justice of the European Union to clarify the jurisdictional framework. That case is a warning against reducing a British-French estate to a single nationality or a single document.<\/p>\n

The will and the SCI articles must work together. A will can deal with the deceased\u2019s shares, but it cannot rewrite the company\u2019s transfer rules. Conversely, an SCI clause cannot necessarily defeat the succession rights that apply outside the company. The family should decide whether the survivor is meant to receive control, income, occupation of the home, a right to buy the other shares, or merely a financial payment. \u201cThe house stays in the family\u201d is not a legal mechanism. It must be translated into share allocation, voting rights, a valuation process, funding for a buy-out and a timetable.<\/p>\n

That is particularly important for a blended family. A surviving spouse may need to remain in the French home, while children from an earlier relationship may expect to receive their inheritance. If the spouse receives a life interest or usufruct over shares, the children may hold the bare ownership. A d\u00e9membrement<\/em>, meaning a split between the right to use and receive income and the bare ownership, can be useful, but it creates questions about voting, distributions, tax and the sale of the underlying property. The articles should state who votes on a sale and how a disagreement between the usufructuary and bare owner is resolved.<\/p>\n

The family should also distinguish the civil value of the shares from their economic value. A minority block may not be worth the same as a controlling block. The articles can provide a valuation method, but a formula based on a historic property value may become unfair after a decade of inflation, works, debt repayment or exchange-rate movement. A discounted valuation can be attacked if it was designed only to reduce a child\u2019s inheritance. Independent valuation evidence and a clear date for valuation matter more than an attractive formula drafted when the SCI was created.<\/p>\n

French law also provides a mechanism for a reserved heir to challenge an excessive gift. Article 921 of the French Civil Code<\/a> states that the reduction action is subject to a five-year period from the opening of the succession or a two-year period from knowledge of the infringement, with a ten-year long-stop from death. The exact calculation and the applicable law still require advice on the facts. The practical point is that a family should not wait for a dispute before preserving gift deeds, share valuations, bank transfers and evidence of the donor\u2019s intentions.<\/p>\n

For a British family, the succession file should be bilingual in substance even where the documents are not. It should identify each person\u2019s full legal name, nationality, habitual residence, tax residence, marital status, children, previous wills and the jurisdiction in which each document was signed. It should retain certified copies and translations where a French notary, court or tax authority may need them. It should also explain the intended result in plain language: who may live in the property, who may manage the SCI, who receives income, who may demand a sale and how the others are paid.<\/p>\n

II. What are the risks, taxes and exit rules for British SCI families?<\/h2>\n

A. Who controls the SCI, and what happens when an heir or spouse wants out?<\/h3>\n

The central governance risk is confusing ownership of shares with control of the SCI. A person can own a substantial economic interest and still lack the vote needed to appoint a manager or approve a major transaction. The manager may have wide operational authority, while extraordinary decisions remain subject to the articles or to the statutory default. Article 1852 of the French Civil Code<\/a> says that \u201cLes d\u00e9cisions qui exc\u00e8dent les pouvoirs reconnus aux g\u00e9rants sont prises selon les dispositions statutaires ou, en l’absence de telles dispositions, \u00e0 l’unanimit\u00e9 des associ\u00e9s.\u201d A badly drafted SCI can therefore oscillate between excessive manager power and an impossible unanimity requirement.<\/p>\n

The manager\u2019s accountability must also be real. Article 1856 of the French Civil Code<\/a> provides that \u201cLes g\u00e9rants doivent, au moins une fois dans l’ann\u00e9e, rendre compte de leur gestion aux associ\u00e9s.\u201d The family should receive annual accounts, a bank reconciliation, details of rent and expenses, loan balances, insurance, works, tax filings and any related-party transaction. A British shareholder living in the UK should not be left dependent on informal family updates. The articles and family process should say how documents are delivered, in which language, and how much notice is required for a meeting.<\/p>\n

The right to information is not a courtesy. Article 1855 of the Civil Code<\/a> gives associates a right to obtain, at least once a year, communication of the company\u2019s books and documents and to ask written questions about management. The article states that those questions must receive a written answer within one month. This is useful where one shareholder suspects that the SCI is paying a family member, undercharging rent, borrowing without approval or carrying out works without a proper decision. The manager should keep an audit trail instead of relying on a family WhatsApp conversation.<\/p>\n

There is also a personal-liability point that is often overlooked by British clients. Article 1857 of the Civil Code<\/a> says: \u201cA l’\u00e9gard des tiers, les associ\u00e9s r\u00e9pondent ind\u00e9finiment des dettes sociales \u00e0 proportion de leur part dans le capital social\u201d. This does not mean that every creditor can immediately seize a shareholder\u2019s personal assets as though there were no company, but it does mean that an SCI is not a complete liability shield. If the company cannot pay, the associates may have an unlimited contribution obligation in proportion to their shares, subject to the legal conditions. A bank guarantee, mortgage, tax debt or major repair bill therefore needs to be considered in the family\u2019s risk plan.<\/p>\n

Exit provisions are the next pressure point. Under Article 1861 of the Civil Code<\/a>, \u201cLes parts sociales ne peuvent \u00eatre c\u00e9d\u00e9es qu’avec l’agr\u00e9ment de tous les associ\u00e9s\u201d, subject to statutory rules and exceptions. The articles may organise approval for a transfer to a spouse, descendant or third party, but the wording must be checked carefully. Who votes? Does the transferring shareholder vote? What is the deadline? What happens if no answer is given? Is the buyer nominated by the family, or can the shareholder sell on the open market? These details determine whether the clause keeps control within the family or creates a long-term lock-in.<\/p>\n

The Commercial Chamber judgment of 15 May 2012, no. 11-13.240<\/a>, illustrates why the share register and approval procedure matter. The case record refers to the fact that \u201cM. et Mme X…-Y… avaient chacun la qualit\u00e9 d’associ\u00e9\u201d and examines the consequences of the family members\u2019 position and the valuation process. The lesson is practical: a transfer or inheritance dispute cannot be analysed from a family tree alone. The court will look at the SCI\u2019s articles, the decisions taken, the requests made by the parties and the evidence of the shareholding.<\/p>\n

Timing can be decisive. In the Third Civil Chamber judgment of 16 January 2020, no. 18-26.010<\/a>, the Court dealt with the failure to notify a refusal within the period fixed by the articles. The judgment\u2019s formulation is that \u201cla SCI n’avait pas notifi\u00e9 son refus dans le d\u00e9lai fix\u00e9 par les statuts\u201d. A family that wants approval rights must follow its own deadline. A British heir who is told informally to wait for a family decision should obtain a dated written response and preserve the evidence of when the request was received.<\/p>\n

Death does not automatically dissolve the SCI. Article 1870 of the Civil Code<\/a> begins: \u201cLa soci\u00e9t\u00e9 n’est pas dissoute par le d\u00e9c\u00e8s d’un associ\u00e9\u201d. It then permits the articles to require approval of heirs, to continue with surviving associates, or to arrange other outcomes. The family should decide this while everyone is alive. If heirs are not admitted as associates, Article 1870-1<\/a> states that \u201cLes h\u00e9ritiers ou l\u00e9gataires qui ne deviennent pas associ\u00e9s n’ont droit qu’\u00e0 la valeur des parts sociales de leur auteur\u201d. That may preserve management continuity, but it creates a funding obligation: someone must pay the excluded heir, and the value must be determined at the legally relevant date.<\/p>\n

The Third Civil Chamber judgment of 15 March 2018, no. 17-13.187<\/a>, concerned the application of an SCI\u2019s death and approval provisions to heirs who did not become associates. It is a useful reminder that a clause excluding an heir from membership does not necessarily deprive that heir of the economic value of the deceased\u2019s shares. A British family should therefore ask two separate questions: who controls the SCI after death, and how is the person who does not become a shareholder paid? Treating those as the same question is a common source of conflict.<\/p>\n

An associate who cannot continue may have a withdrawal route, but it is not an automatic right to cash on demand. Article 1869 of the Civil Code<\/a> provides that withdrawal can be authorised for serious reasons by a court, using the words \u201cCe retrait peut \u00e9galement \u00eatre autoris\u00e9 pour justes motifs par une d\u00e9cision de justice\u201d. The articles should address voluntary exit, deadlock, divorce, bankruptcy, a change of residence, an inability to pay a tax bill and a shareholder\u2019s need to realise value. It should also identify who obtains the valuation, how debt is taken into account, and whether the SCI or the other shareholders fund the purchase.<\/p>\n

A workable family protocol should cover at least the following questions:<\/p>\n