{"id":2106334,"date":"2026-08-25T01:01:53","date_gmt":"2026-08-24T23:01:53","guid":{"rendered":"https:\/\/kohenavocats.fr\/2026\/08\/25\/transfer-french-sci-shares-to-children-british-family-brexit\/"},"modified":"2026-08-25T01:01:53","modified_gmt":"2026-08-24T23:01:53","slug":"transfer-french-sci-shares-to-children-british-family-brexit","status":"publish","type":"post","link":"https:\/\/kohenavocats.fr\/en\/2026\/08\/25\/transfer-french-sci-shares-to-children-british-family-brexit\/","title":{"rendered":"How Can British Families Transfer French SCI Shares to Their Children After Brexit? Gift Tax, UK IHT and the Notarial Procedure"},"content":{"rendered":"

British families who own a French soci\u00e9t\u00e9 civile immobili\u00e8re<\/em> (SCI, a French civil property-holding company) often want to pass shares to their children without giving up every income or management right immediately. After Brexit, that decision has an additional cross-border dimension. The family may have a British tax history, children living in the United Kingdom, a French rental property, a UK will, and a French company whose articles were written years before the transfer was considered. A transfer that looks like a simple family gift can therefore affect French company law, French gift tax, UK Inheritance Tax, future capital gains, and the balance between children at the parents\u2019 deaths.<\/p>\n

This guide deals with the transfer of existing French SCI shares to children. It does not address the purchase of the underlying property or the creation of a new company. For the general structure, control and exit risks of an SCI, see our broader guide to French SCI risks for British families<\/a>. The practical question here is narrower: how should a British parent organise a gift of full ownership or bare ownership of SCI shares, what must the notarial deed and the company records contain, and which French and UK checks must be completed before signing? The answer depends on the family\u2019s residence, the value and liabilities of the SCI, the articles, the age of the usufructuary, earlier gifts, and the succession law that may govern the estate.<\/p>\n

I. How can a British family transfer French SCI shares to its children after Brexit?<\/h2>\n

A. What must the French deed, SCI articles and company records contain?<\/h3>\n

An SCI share transfer should begin with classification, not a form. A transfer for no price is ordinarily a donation, even if the family describes it as a \u201cfamily arrangement\u201d or records it in a private English document. Article 894 of the French Civil Code defines an inter vivos gift as an act by which the donor gives up the thing donated \u201cactuellement et irr\u00e9vocablement<\/q>\u201d for the benefit of an accepting donee. That means the parents must decide what is actually being given: a stated number of shares, the bare ownership of those shares, or full ownership subject to a particular governance arrangement.<\/p>\n

The starting statutory reference is Article 894 of the French Civil Code<\/a>. The formal rule is equally important. Article 931 of the French Civil Code<\/a> provides: \u201cTous actes portant donation entre vifs seront pass\u00e9s devant notaires dans la forme ordinaire des contrats ; et il en restera minute, sous peine de nullit\u00e9.<\/q>\u201d In practical terms, a French notarial deed is not merely a convenient way of documenting the family\u2019s intention. A donation deed that is not made in the required form may be exposed to a validity challenge.<\/p>\n

The notary must read the SCI articles before preparing the deed. The default rule in Article 1861 of the French Civil Code<\/a> says that social shares may be transferred only with the approval of all the associates, while also allowing the articles to set a different majority and, subject to the drafting, treating transfers to ascendants or descendants differently. The fact that the recipient is a child therefore does not allow the family to skip the articles. An SCI may contain a family-specific approval clause, a notice method, a time limit, or a rule that requires an assembly resolution even where the statutory default would be more flexible.<\/p>\n

The deed should identify the SCI by its exact name, registration number and registered office; the donors and children by their civil-status details; the number and class of shares; their nominal value; the value attributed to the gift; any usufruit (right to use and receive income) and nue-propri\u00e9t\u00e9 (bare ownership without present enjoyment); the acceptance by each child; the treatment of an existing loan or current account; and the applicable approval resolution. If a child is a minor, the parents and notary must deal with the child\u2019s legal capacity and any conflict of interest. The child\u2019s acceptance cannot be treated as a casual signature at the end of an English family agreement.<\/p>\n

A British family should expect the notary to request passports, birth certificates, marriage or civil-partnership evidence, family relationship evidence, tax-residence information, the SCI articles and amendments, the latest extrait Kbis<\/em> (company registration extract), title documents, loan statements, annual accounts, rental information, bank statements and evidence of the value of the property and the shares. UK documents may need a sworn French translation and, depending on the document and the receiving authority, an apostille. The exact list should be obtained from the chosen notary before the signing date. Sending an incomplete bundle from the UK can delay the deed and create a mismatch between the civil-status facts, the tax return and the company register.<\/p>\n

The transfer also has to become effective against the SCI and third parties. Article 1861<\/a> deals with approval, while Article 1865 of the French Civil Code<\/a> states that a transfer must be recorded in writing, made opposable to the company through the prescribed form or the company register where the articles allow it, and made opposable to third parties after the required formalities and publication at the registre du commerce et des soci\u00e9t\u00e9s<\/em> (commercial and companies register). The notary\u2019s work should therefore continue beyond the signature: the SCI\u2019s register of movements, the articles if amended, the beneficial-owner information and the public filing must all be checked.<\/p>\n

A new rule also deserves attention in a 2026 transfer. Article 1865-1 of the French Civil Code<\/a> now sets formal requirements, on pain of nullity, for the transfer of shares or securities of a property-heavy legal person and lists an authentic instrument, an instrument countersigned by a lawyer, or an instrument established by another authorised professional. Its application to a particular gratuitous family transfer must be classified by the professional handling the transaction; it should not be guessed from an English template. Article 931 already gives the ordinary donation rule. The sensible request to the notary is a written explanation of which instrument is being used, which rule it satisfies, and which filings will follow.<\/p>\n

There is a useful warning in the judgment of the French Supreme Court, First Civil Division, 6 October 2011, nos. 10-19.190 and 10-30.797, concerning a donation-partage (a lifetime gift dividing assets between presumptive heirs) of SCI shares. The Court\u2019s published decision is available on L\u00e9gifrance<\/a>. It recalled the notary\u2019s duty to make the transaction effective, using the words \u201cIl incombe au notaire, tenu de s’assurer de l’efficacit\u00e9 de l’acte auquel il pr\u00eate son concours<\/q>\u201d. A family should ask for proof of the post-signature filings rather than assuming that a signed deed alone has completed the transfer.<\/p>\n

Finally, distinguish a donation from a sale for a token price. A \u201c\u00a31 transfer\u201d can still be a gift, a mixed transaction, or a transfer that creates a valuation and tax question. The deed should state the real intention and the consideration, if any. If the parents want one child to receive the shares while another receives cash or a different asset, that equality decision should be documented at the same time. Treating a transfer as a sale simply because it avoids the word donation can create a more serious dispute later.<\/p>\n

B. Should parents give full ownership or keep the usufruit of the SCI shares?<\/h3>\n

The most important family choice is often not whether to transfer shares, but which rights to transfer. A gift in full ownership gives the child the economic and voting position attached to the shares, subject to the articles and the company\u2019s rules. A gift of bare ownership allows the parents to retain the usufruit. The parents may continue to receive distributions that belong to the usufruit, while the children hold the future full ownership when the usufruit ends. This can be appropriate where the parents need income or want to organise a gradual transmission, but it is not a way to retain every decision forever.<\/p>\n

The tax value of the split is not chosen by a family estimate. Article 669 of the French General Tax Code<\/a> contains an age-based table for valuing usufruit and bare ownership. For example, the statutory split changes according to the age of the usufructuary. A parent below the relevant age threshold does not have the same taxable bare-ownership value as a parent in a later age band. The notary must identify the correct age on the date of the gift and apply the legal table, while also considering whether the asset and the transaction fit the provision.<\/p>\n

The family must also decide how income and voting will work. Article 1844 of the French Civil Code<\/a> recognises the participation of both the usufructuary and the bare owner in collective decisions and provides a default allocation of voting rights, while permitting the articles or an agreement to organise the position within the legal limits. The deed, articles and any family agreement should be read together. If a parent expects to approve a sale alone but the child expects to control the extraordinary decision, the family has not completed a plan; it has postponed a conflict.<\/p>\n

Revenue is another fault line. A rental SCI may have debt, works, insurance, tax and cash calls. Retaining the usufruit may preserve the right to income, but it does not remove the child\u2019s exposure to the life of the company or make the child a passive beneficiary in every respect. The company\u2019s manager continues to owe duties to the SCI. Article 1833 of the French Civil Code<\/a> states that a company must have a lawful object and be constituted in the common interest of the associates; it is managed in its corporate interest. A family promise that the property will never be sold cannot override the company\u2019s legal and financial reality.<\/p>\n

Liability must be explained to the children before they accept. Under Article 1857 of the French Civil Code<\/a>, associates are indefinitely liable to third parties for social debts in proportion to their capital share at the relevant date. This does not mean that a child automatically pays the SCI\u2019s debts from personal assets whenever a bill arrives, but it does mean that holding shares is not risk-free. The notary and the family\u2019s adviser should review loans, guarantees, unpaid rent, tax arrears and pending proceedings before the gift is accepted.<\/p>\n

Use a written decision tree. Full ownership may be more suitable where the child will manage the property and the parents no longer need the income. Bare ownership may suit parents who need distributions and want to pass the capital progressively. A donation-partage may be more suitable where several children are involved and the family wants the allocation recorded in one transaction. Service-Public\u2019s guidance on donation-partage<\/a> describes the instrument as a way of giving and dividing property during life, but it does not replace an individual assessment of the SCI\u2019s liabilities, the children\u2019s residence and the cross-border tax effects.<\/p>\n

The valuation file should be capable of surviving a later challenge. It should set out the property\u2019s market evidence, the SCI\u2019s debts, current accounts, cash, pending works, leases, tax position, restrictions on transfer and any discount that is actually justified by the articles and the market. Article 761 of the French General Tax Code<\/a> uses the market value at the relevant date as the starting point for valuation. If an associate later disputes the value of a right, the procedure in Article 1843-4 of the French Civil Code<\/a> may bring an expert into the valuation process. A family should not manufacture a discount simply to fit inside an allowance.<\/p>\n

The Supreme Court\u2019s First Civil Division judgment of 23 January 2002, no. 00-16.703, available on L\u00e9gifrance<\/a>, is a reminder that bare ownership of SCI shares and the valuation of a donation are legal questions, not just spreadsheet choices. The transaction should state what was valued, why that method was used, and which rights remain with each person. That clarity is particularly important when the parents live in the UK, the child lives in France, or the family expects the property to be sold within a few years.<\/p>\n

II. What gift tax, UK IHT and inheritance safeguards apply to British families?<\/h2>\n

A. How are French gift tax and the 15-year allowances calculated?<\/h3>\n

French gift tax is driven by the legal connection between the donor, the child and the asset. Article 750 ter of the French General Tax Code<\/a> contains different connecting rules according to the donor\u2019s tax domicile, the location or nature of the assets, and the donee\u2019s residence. It is unsafe to say that a child living in Britain is outside French gift tax merely because the child is not French resident. Shares in an SCI connected with French immovable property require a specific cross-border analysis, and the answer can change if the donor or donee has recently moved.<\/p>\n

For a parent-to-child transfer, Article 779 of the French General Tax Code<\/a> provides a \u20ac100,000 allowance on the share of each parent and each living child, subject to the statutory conditions. Article 784<\/a> requires earlier gifts within the relevant 15-year period to be taken into account when calculating what allowance remains. The allowance is not a new \u20ac100,000 pot created merely because the parents have moved between the UK and France. The notary needs dates and values for previous gifts, including gifts declared in another country where they may affect the analysis.<\/p>\n

Any taxable balance is then assessed under the direct-line scale in Article 777 of the French General Tax Code<\/a>. The scale is progressive and ranges through bands that include 5%, 10%, 15%, 20%, 30%, 40% and 45%. The relevant amount is not the gross value of the French building. It is the value of the rights transferred, after the correct valuation of debt, ownership split and available allowance. The family should ask for a written calculation showing the donor, donee, taxable value, allowance used, rate applied and payment date.<\/p>\n

Consider a simplified illustration. Suppose one parent gives one child SCI shares valued at \u20ac120,000 in full ownership, no earlier gift has used the parent\u2019s allowance, and no special exemption or debt issue changes the calculation. The first \u20ac100,000 may fall within the parent-to-child allowance, leaving \u20ac20,000 for the progressive scale. At the first 5% band, the illustrative duty would be \u20ac1,000. That is not a quote for a real transaction: the valuation of shares, prior gifts, the child\u2019s status, the identity of the donor, the payment of professional costs, and the applicable cross-border rules can change the result. If both parents make separate gifts, each parent\u2019s entitlement must be tested separately rather than simply doubling a headline figure.<\/p>\n

A bare-ownership gift changes the calculation because the taxable value is the value of the bare ownership under the age table. It does not make the transfer invisible. The deed should state the full value of the shares, the usufruit value, the bare-ownership value and the date on which the tax is calculated. It should also explain what happens to dividends, exceptional distributions, current accounts and a sale of the SCI\u2019s property. A family that focuses only on the allowance can overlook the fact that the child has acquired a real legal position in a company.<\/p>\n

Declaration is part of completion. The French tax administration\u2019s donation guidance<\/a> explains that donations must be declared and that, from 2026, many declarations can be made through the online service, subject to the stated exceptions. The administration has also published information about the online declaration of gifts and transfers of social rights, including SCI shares, on impots.gouv.fr<\/a>. The notary should confirm the correct service, form, supporting documents and payment route rather than relying on a generic UK gift form.<\/p>\n

Keep a complete cross-border tax file. It should include:<\/p>\n