{"id":2115177,"date":"2026-09-02T05:05:16","date_gmt":"2026-09-02T03:05:16","guid":{"rendered":"https:\/\/kohenavocats.fr\/2026\/09\/02\/what-happens-french-sci-shares-british-shareholder-dies-uk-inheritance-tax\/"},"modified":"2026-09-02T05:05:16","modified_gmt":"2026-09-02T03:05:16","slug":"what-happens-french-sci-shares-british-shareholder-dies-uk-inheritance-tax","status":"publish","type":"post","link":"https:\/\/kohenavocats.fr\/en\/2026\/09\/02\/what-happens-french-sci-shares-british-shareholder-dies-uk-inheritance-tax\/","title":{"rendered":"What Happens to French SCI Shares When a British Shareholder Dies? UK Inheritance Tax and French Succession"},"content":{"rendered":"

When a British shareholder of a French soci\u00e9t\u00e9 civile immobili\u00e8re<\/em> (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\u2019s parts sociales<\/em> (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\u2013UK Convention on inheritance taxes may all examine the same economic value, but they do not use identical tests.<\/p>\n

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<\/em> (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\u2019s articles, the deceased person\u2019s tax residence, the heirs\u2019 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.<\/p>\n

I. What happens to French SCI shares when a British shareholder dies after Brexit?<\/h2>\n

A. Do the heirs become shareholders automatically, or must they obtain approval?<\/h3>\n

The starting point is the SCI\u2019s 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\u2019s governance documents. It does not, by itself, transfer the house into each heir\u2019s personal name.<\/p>\n

French law gives a default rule, subject to the articles. Article 1870 of the Civil Code states that La soci\u00e9t\u00e9 n’est pas dissoute par le d\u00e9c\u00e8s d’un associ\u00e9<\/q>\u2014the company is not dissolved by the death of a member\u2014and 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 L\u00e9gifrance, Civil Code article 1870<\/a>. 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.<\/p>\n

\u201cApproval\u201d is the usual English translation of agr\u00e9ment<\/em>. In practice, the notaire and the SCI\u2019s 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\u2019 agreement or a prior gift of bare ownership.<\/p>\n

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 notori\u00e9t\u00e9<\/em>, 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\u2019s 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.<\/p>\n

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 L\u00e9gifrance, Civil Code article 1854<\/a>. 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.<\/p>\n

The role attached to the shares also matters. A share may be split between a usufructuary\u2014the person entitled to use the economic benefits\u2014and a nu-propri\u00e9taire<\/em>, 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<\/em> (undivided ownership) and voting arrangements between a usufructuary and bare owner. The official text is on L\u00e9gifrance, Civil Code article 1844<\/a>. The estate should not treat the death as a straightforward transfer of a whole bundle of unrestricted voting and income rights.<\/p>\n

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.<\/p>\n

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.<\/p>\n

B. What if the SCI\u2019s articles exclude or delay an heir?<\/h3>\n

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\u2019s shares, and that this value is determined at the date of death under Article 1843-4. The official wording includes n’ont droit qu’\u00e0 la valeur des parts sociales de leur auteur<\/q> and La valeur de ces droits sociaux est d\u00e9termin\u00e9e au jour du d\u00e9c\u00e8s<\/q>; both propositions appear in L\u00e9gifrance, Civil Code article 1870-1<\/a>.<\/p>\n

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\u2019s 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.<\/p>\n

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\u2019s assets, liabilities, share rights and the facts existing at the date of death.<\/p>\n

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, troisi\u00e8me chambre civile, 15 March 2018, no. 17-13.187<\/a>, the court examined the consequences of the articles\u2019 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 \u201cthe family inherits the SCI\u201d.<\/p>\n

Another decision illustrates why later amendments must be checked. In Cour de cassation, troisi\u00e8me chambre civile, 27 May 2021, no. 20-15.053<\/a>, 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 modifi\u00e9s<\/q>. 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.<\/p>\n

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 L\u00e9gifrance, Civil Code article 1869<\/a>. 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.<\/p>\n

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 L\u00e9gifrance, Civil Code article 1844-9<\/a>. 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.<\/p>\n

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.<\/p>\n

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.<\/p>\n

II. How are French SCI shares valued and taxed in the UK and France?<\/h2>\n

A. What value and documents must be put before the French notaire?<\/h3>\n

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 L\u00e9gifrance, Civil Code article 1843-4<\/a>. 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.<\/p>\n

In Cour de cassation, chambre commerciale, 30 November 2004, no. 03-15.278<\/a>, the court stated that le pouvoir de d\u00e9signer un expert charg\u00e9 de l’\u00e9valuation des droits sociaux appartient au seul pr\u00e9sident du tribunal<\/q>. 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.<\/p>\n

The same caution<\/a> appears in Cour de cassation, chambre commerciale, 13 September 2017, no. 16-12.978<\/a>, 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\u2019s mission is to apply the relevant legal and contractual valuation rules, not to redesign the parties\u2019 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.<\/p>\n

A proper SCI share file usually includes the following:<\/p>\n