You bought the stone house in the Dordogne ten years ago, and the French notaire \u2014 the state-appointed conveyancing lawyer who handles every French property deal \u2014 suggested holding it through a family SCI. A SCI, or soci\u00e9t\u00e9 civile immobili\u00e8re, is a French family property company: a civil-law vehicle whose only purpose is to own and manage property. Since Brexit, that sensible arrangement raises a string of sharper questions. Is the rental income still taxed the same way now that you are British residents outside the European Union. Does the dreaded annual 3% tax on French property held through companies now bite your SCI. What happens if you sell the house, or sell your shares in the company, or if one partner dies. And when the tax office sends a bill you believe is wrong, how do you challenge it. This guide answers each of those questions in turn, with the exact legal texts and court decisions behind every answer, and the practical remedy at each stage.<\/p>\n
A family SCI starts life as what French lawyers call a transparent company. Under the Civil Code, “La soci\u00e9t\u00e9 est institu\u00e9e par deux ou plusieurs personnes qui conviennent par un contrat d’affecter \u00e0 une entreprise commune des biens ou leur industrie en vue de partager le b\u00e9n\u00e9fice ou de profiter de l’\u00e9conomie qui pourra en r\u00e9sulter.” (article 1832 of the Civil Code<\/a>). And “Les dispositions du pr\u00e9sent chapitre sont applicables \u00e0 toutes les soci\u00e9t\u00e9s civiles, \u00e0 moins qu’il n’y soit d\u00e9rog\u00e9 par le statut l\u00e9gal particulier auquel certaines d’entre elles sont assujetties.” (article 1845 of the Civil Code<\/a>). In plain terms, the SCI is a real legal person with its own name, registered office and property, created by contract between at least two partners, and managed by a g\u00e9rant, the appointed manager, under rules the partners write themselves in the articles of association.<\/p>\n For tax, the default is transparency. The official service-public.fr guidance confirms the same default: a SCI falls under personal income tax unless it elects otherwise, with each partner taxed personally on their share of the rental profit in proportion to their holding (service-public.fr, SCI fact sheet<\/a>). The statute behind that rule taxes the partners personally: “les associ\u00e9s des soci\u00e9t\u00e9s en nom collectif et les commandit\u00e9s des soci\u00e9t\u00e9s en commandite simple sont, lorsque ces soci\u00e9t\u00e9s n’ont pas opt\u00e9 pour le r\u00e9gime fiscal des soci\u00e9t\u00e9s de capitaux, personnellement soumis \u00e0 l’imp\u00f4t sur le revenu pour la part de b\u00e9n\u00e9fices sociaux correspondant \u00e0 leurs droits dans la soci\u00e9t\u00e9”, and “Il en est de m\u00eame, sous les m\u00eames conditions : 1\u00b0 Des membres des soci\u00e9t\u00e9s civiles qui ne rev\u00eatent pas, en droit ou en fait, l’une des formes de soci\u00e9t\u00e9s vis\u00e9es au 1 de l’article 206” (article 8 of the General Tax Code<\/a>). So a British couple letting their Dordogne house through an SCI taxed under income tax each declare their share of the rent in France, usually as rental income from unfurnished property, and each pay French tax and social charges on that share.<\/p>\n Brexit did not change that mechanism, but it changed the context around it. If you are resident in France, you declare worldwide income in France and claim relief for tax paid in the United Kingdom. If you stayed resident in Britain with only a French holiday home, France taxes the French-source rent because “Sont consid\u00e9r\u00e9s comme revenus de source fran\u00e7aise : a. Les revenus d’immeubles sis en France ou de droits relatifs \u00e0 ces immeubles” (article 164 B of the General Tax Code<\/a>), and Britain gives credit under the treaty. The British government’s own guidance confirms the framework: a double taxation agreement with France means the same income is not taxed twice, with details in the published treaty texts (gov.uk, Living in France<\/a>; treaty texts at gov.uk, France tax treaties<\/a>). Tell HM Revenue and Customs about the French income every year and claim the treaty credit; do not assume the French return covers your British obligations. Readers already renting out property in their own names will find the parallel mechanics explained in our guide to British residents declaring United Kingdom rental income in France<\/a>.<\/p>\n The alternative is the company-tax option. A SCI may elect for imp\u00f4t sur les soci\u00e9t\u00e9s, company tax, which changes everything: the company pays tax on its profit, the rent becomes company revenue against which loan interest, works and depreciation can be set, and partners are taxed only on what is actually distributed. The companies liable to that tax are listed in article 206 of the General Tax Code<\/a>, and the election procedure is strict. Service-public.fr warns that the election must be notified to the business tax office before the end of the third month of the relevant financial year, and that it can be revoked only until the fifth year after the election takes effect (service-public.fr, SCI fact sheet<\/a>). The SIE is the business tax office for the area. Miss the third-month deadline and the election waits a year. Let the fifth year pass without revoking and the choice is locked in for good. For a British family, company tax often suits a house being renovated for letting, because improvement works can be depreciated inside the company whereas they are not deductible under personal rental income; it usually harms a family that simply occupies the house, because living in a company-taxed property creates a taxable benefit. Model both routes with figures before electing, because unwinding a company-tax SCI later triggers tax on the unrealised gain.<\/p>\n Two warnings specific to British owners. First, furnished holiday letting inside an income-tax SCI is dangerous territory: serviced, furnished activity is commercial in nature, and a civil company that systematically behaves like a hotel business can be reclassified and pushed into company tax by force, with back tax and penalties. Keep the SCI to bare residential letting and family occupation unless you have taken advice. Second, partners are not shielded from the company’s debts the way shareholders of a limited company are. Service-public.fr notes that each partner answers for the company debts only in proportion to their shareholding (service-public.fr, SCI fact sheet<\/a>) Each partner answers for debts in proportion to their holding, after the creditor has first pursued the company itself. Lenders know this, which is why French banks routinely ask SCI partners for personal guarantees.<\/p>\n If the assessment notice, the avis, looks wrong \u2014 wrong share of profit, denied charges, wrong social-charge calculation \u2014 the remedy is the r\u00e9clamation, the formal tax complaint filed with the tax office, followed by appeal to the administrative court if the office rejects it or stays silent. File the r\u00e9clamation as soon as the notice arrives, state precisely which figures are disputed and attach the SCI accounts, the distribution resolution and the bank statements. Never simply ignore the notice while negotiating: enforcement runs separately from discussion.<\/p>\n The tax British owners fear most is the taxe sur la valeur v\u00e9nale, the annual tax on the market value of French property held through legal entities. The rule is blunt: “Les entit\u00e9s juridiques : personnes morales, organismes, fiducies ou institutions comparables qui, directement ou par entit\u00e9 interpos\u00e9e, poss\u00e8dent un ou plusieurs immeubles situ\u00e9s en France ou sont titulaires de droits r\u00e9els portant sur ces biens sont redevables d’une taxe annuelle \u00e9gale \u00e0 3 % de la valeur v\u00e9nale de ces immeubles ou droits.” (article 990 D of the General Tax Code<\/a>). Three per cent of the market value, every year, assessed on the position at 1 January. On a house worth 400,000 euros that is 12,000 euros a year, which is why this section matters more than any other in this guide.<\/p>\n Does it catch an ordinary British family SCI. The tax office’s own international page confirms the scope: French or foreign entities that directly or indirectly own French property or hold real rights over it fall within the 3% charge (impots.gouv.fr, taxe sur la valeur v\u00e9nale<\/a>). A French SCI is a French legal entity owning a French house, so it falls inside the charge in principle. Whether it actually pays depends on the exemptions in article 990 E of the General Tax Code<\/a>, and the decisive one for British families is the disclosure exemption: entities that reveal their partners can escape the tax. The tax office explains that qualifying entities can obtain the exemption tied to article 990 E by spontaneously filing disclosure form 2746 each year no later than 15 May (impots.gouv.fr, taxe sur la valeur v\u00e9nale<\/a>). Form 2746, filed by 15 May each year, names every partner with identity and address, and the exemption follows proportionally.<\/p>\n The Brexit nuance is this. Before 2021 a SCI whose partners were European residents sheltered comfortably behind the European exemption categories. Since the United Kingdom left the Union, British-resident partners must rely on the disclosure route, and the filing must be complete, spontaneous and on time. In practice this means: calendar the 15 May deadline now, file form 2746 every single year even when nothing has changed, declare every partner including minor children holding shares, and keep proof of filing. A late, incomplete or missing 2746 is the single most common reason a family SCI receives a 3% assessment, and the tax office shows little mercy on deadlines. If your SCI holds the house through a chain \u2014 for example a British company holding the SCI shares \u2014 each level must be disclosed, because the tax follows chains of holdings through intermediaries.<\/p>\n If the bill arrives despite the filing, challenge it methodically. First, check who is named: the Cour de cassation held on 28 May 2026 (no. 24-18.404) that in chains of holdings the tax is owed by the entities closest to the property while intermediaries are only jointly liable for payment, and it drew a procedural consequence from that distinction: “la proc\u00e9dure ensuite suivie doit \u00eatre contradictoire et la loyaut\u00e9 des d\u00e9bats l’oblige \u00e0 notifier les actes de celle-ci \u00e0 tous les redevables l\u00e9gaux”, while as regards the 3% tax specifically, “l’administration n’est pas tenue de notifier, d\u00e8s leur \u00e9tablissement, les actes de la proc\u00e9dure post\u00e9rieurs \u00e0 la proposition de rectification \u00e0 l’ensemble des personnes morales, organismes, fiducies ou institutions comparables, interpos\u00e9s entre le ou les redevables de cette taxe et les immeubles ou droit immobiliers, ces entit\u00e9s interpos\u00e9es n’\u00e9tant que responsables solidaires de son paiement et non les redevables l\u00e9gaux de cette taxe” (Cass., commercial chamber, 28 May 2026, no. 24-18.404<\/a>). In practice, identify whether you are pursued as the legal debtor or as a jointly liable intermediary, because your procedural rights differ. Second, file the r\u00e9clamation disputing the legal basis point by point: exemption conditions met, valuation excessive, wrong year. Third, if the property was genuinely the partners’ residence and the structure was never a secrecy vehicle, say so with evidence \u2014 council tax records, utility bills, residence permits \u2014 because the purpose of the 3% tax is fighting anonymous ownership, and a transparent family SCI is the opposite of its target.<\/p>\n One day the children have grown, the stairs are too many, and the house must be sold. A family SCI can sell in two ways: the company sells the house, or the partners sell their shares, the parts sociales, to the buyer. The tax consequences differ sharply, so decide before signing anything.<\/p>\n If the SCI taxed under income tax sells the house, the gain follows the private capital-gains regime: “les plus-values r\u00e9alis\u00e9es par les personnes physiques ou les soci\u00e9t\u00e9s ou groupements qui rel\u00e8vent des articles 8 \u00e0 8 ter , lors de la cession \u00e0 titre on\u00e9reux de biens immobiliers b\u00e2tis ou non b\u00e2tis ou de droits relatifs \u00e0 ces biens, sont passibles de l’imp\u00f4t sur le revenu dans les conditions pr\u00e9vues aux articles 150 V \u00e0 150 VH .” (article 150 U of the General Tax Code<\/a>). Each partner is taxed on their share of the gain, with the familiar taper relief over the holding period and full exemption after thirty years for the income-tax portion. The main-residence exemption will not save a Dordogne second home. If instead the partners sell their shares, the gain falls under the regime for disposals of shares and membership rights in article 150-0 A of the General Tax Code<\/a>, which for shares in property-rich companies largely mirrors the property regime but with its own holding-period arithmetic. Inside a company-tax SCI, both routes are harsher: the company pays company tax on the full gain with no taper, and distributing the proceeds taxes the partners a second time. This is the trap to model before electing for company tax: cheaper during the letting years, far more expensive in the sale year.<\/p>\n Non-resident partners face an extra layer. France levies its tax at source on property gains realised by non-residents: “Sous r\u00e9serve des conventions internationales, les plus-values, telles que d\u00e9finies aux e bis et e ter du I de l’article 164 B , r\u00e9alis\u00e9es par les personnes et organismes mentionn\u00e9s au 2 du I lors de la cession des biens ou droits mentionn\u00e9s au 3 sont soumises \u00e0 un pr\u00e9l\u00e8vement selon les taux fix\u00e9s au III bis.” (article 244 bis A of the General Tax Code<\/a>). The notaire appoints a tax representative, the repr\u00e9sentant fiscal, collects the levy on completion day, and the seller claims any treaty relief afterwards. British sellers therefore need to budget for the levy being withheld even where they expect the treaty to reduce the final charge, and to file the French gain return on time to avoid penalties. Keep every invoice for works, purchase costs and agency fees from the day of acquisition: each documented euro of cost base is an euro off the taxable gain, and lost receipts cannot be reconstructed at the notaire’s desk.<\/p>\n The company-law lock matters as much as the tax. Shares in a SCI cannot be sold freely to an outsider: “Les parts sociales ne peuvent \u00eatre c\u00e9d\u00e9es qu’avec l’agr\u00e9ment de tous les associ\u00e9s.” (article 1861 of the Civil Code<\/a>). The agr\u00e9ment is the prior consent of the partners, unanimous unless the articles say otherwise. In a family this usually means one child’s spouse, or one branch of the family, can block the other’s exit. Draft the articles accordingly from day one: majority consent rather than unanimity, a pre-emption right for remaining partners at an independently valued price, and a buy-out formula. Where no exit was planned and relations have collapsed, the courts can dissolve the company. In a widely followed decision, the Cour de cassation upheld the dissolution of a fifty-fifty SCI where the partners no longer spoke, holding that “l’impossibilit\u00e9 de trouver un accord pour prendre une d\u00e9cision illustrait la perte de l’affectio societatis et d\u00e9montrait le blocage du fonctionnement de la SCI” \u2014 the loss of the shared will to co-operate that is the soul of any company (Cass., 3rd civil chamber, 17 December 2020, no. 19-15.694<\/a>). Dissolution means a court-appointed liquidator, sale of the house, and division of the proceeds: a costly remedy, but a real one, and the reason to negotiate a consensual buy-out first.<\/p>\n To challenge an excessive gain assessment, the route is the same r\u00e9clamation followed by court appeal, but the evidence is arithmetic: acquisition price, documented works, correct holding period, correct taper, correct treaty position. Obtain the notaire’s completion statement, the original purchase deed and every works invoice, and have the calculation independently re-run before paying under protest.<\/p>\n Death is where the SCI meets private international law, and British families must get three layers right: which country’s succession law governs, what France’s forced share does to the plan, and what death duties are due on the shares.<\/p>\n The starting point is the European Succession Regulation, which France applies even though the deceased was British. The default is habitual residence: “Sauf disposition contraire du pr\u00e9sent r\u00e8glement, la loi applicable \u00e0 l’ensemble d’une succession est celle de l’\u00c9tat dans lequel le d\u00e9funt avait sa r\u00e9sidence habituelle au moment de son d\u00e9c\u00e8s.” (Regulation (EU) No 650\/2012, article 21(1)<\/a>) \u2014 in other words, the law of the country where the deceased habitually lived. But a British national can elect English law in the will: “Une personne peut choisir comme loi r\u00e9gissant l’ensemble de sa succession la loi de l’\u00c9tat dont elle poss\u00e8de la nationalit\u00e9 au moment o\u00f9 elle fait ce choix ou au moment de son d\u00e9c\u00e8s.” (Regulation (EU) No 650\/2012, article 22(1)<\/a>), and that choice must be express: “Le choix est formul\u00e9 de mani\u00e8re expresse dans une d\u00e9claration rev\u00eatant la forme d’une disposition \u00e0 cause de mort ou r\u00e9sulte des termes d’une telle disposition.” (Regulation (EU) No 650\/2012, article 22(2)<\/a>). For a British partner in a SCI, the practical advice is simple: put an express election of English law in both the English will and any French testament, keep the two documents consistent, and review the election after every move between Britain and France, because habitual residence can shift the default while the election stands. Our detailed guide to English wills and French houses after Brexit<\/a> walks through the drafting.<\/p>\n The election does not make French forced heirship disappear. The r\u00e9serve h\u00e9r\u00e9ditaire, the forced share, is “la part des biens et droits successoraux dont la loi assure la d\u00e9volution libre de charges \u00e0 certains h\u00e9ritiers dits r\u00e9servataires, s’ils sont appel\u00e9s \u00e0 la succession et s’ils l’acceptent.” (article 912 of the Civil Code<\/a>), and “Les 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 ; le tiers, s’il laisse deux enfants ; le quart, s’il en laisse trois ou un plus grand nombre.” (article 913 of the Civil Code<\/a>). The quotit\u00e9 disponible, the free portion, is whatever is left. The Cour de cassation enforces this firmly where French property is concerned: ruling on a foreign will covering French immovable property, it held that “la d\u00e9volution successorale desdits immeubles devait tenir compte des r\u00e8gles de la r\u00e9serve h\u00e9r\u00e9ditaire, laquelle, d’ordre public interne, ne pouvait \u00eatre \u00e9cart\u00e9e par des dispositions testamentaires \u00e9tablies selon la loi du domicile du d\u00e9funt et r\u00e9gissant son statut personnel” (Cass., 1st civil chamber, 4 July 2018, nos. 17-16.515 and 17-16.522<\/a>). Since 2021 there is also a targeted safety net: “lorsque la loi \u00e9trang\u00e8re applicable \u00e0 la succession ne permet aucun m\u00e9canisme r\u00e9servataire protecteur des enfants, chaque enfant ou ses h\u00e9ritiers ou ses ayants cause peuvent effectuer un pr\u00e9l\u00e8vement compensatoire sur les biens existants situ\u00e9s en France au jour du d\u00e9c\u00e8s, de fa\u00e7on \u00e0 \u00eatre r\u00e9tablis dans les droits r\u00e9servataires que leur octroie la loi fran\u00e7aise, dans la limite de ceux-ci.” (article 913 of the Civil Code, compensatory levy<\/a>). Note the condition carefully: the levy is available where the deceased or at least one child was, at death, a national of a European Union Member State or habitually resident there. A British parent retired in France electing English law remains within reach of the levy through French habitual residence; a wholly Britain-based family whose only French asset is the SCI-held holiday home may fall outside it. Map the family’s nationalities and residences before assuming either outcome.<\/p>\n For SCI shares specifically, remember that what passes on death is not the house but the shares, usually movable property, while the house sits inside the company. That distinction shapes valuation and liquidity: the heir inherits shares that may carry the consent lock described above, and may need to sell to pay the duties. French death duties catch the shares through two limbs. They apply to “Les biens meubles et immeubles situ\u00e9s en France ou hors de France” where the deceased was fiscally domiciled in France, and to “Les biens meubles et immeubles, que ces derniers soient poss\u00e9d\u00e9s directement ou indirectement, situ\u00e9s en France” where the deceased was not domiciled in France, with indirect holding through companies expressly covered (article 750 ter of the General Tax Code<\/a>). The rates, allowances and treaty relief applicable to a British heir are set out in our guide to French death duties on British heirs<\/a>. Fundamentally, the surviving partner should check the articles for approval and pre-emption clauses before the succession starts, commission a realistic valuation of the shares \u2014 minority, illiquid shares are not worth a pro-rata slice of the house \u2014 and file the succession return within the deadline, disputing by r\u00e9clamation any valuation or allowance the office gets wrong.<\/p>\n A British family SCI remains an excellent vehicle for a French house after Brexit, but it is no longer a fit-and-forget one. Keep the company transparent or elect company tax with open eyes and inside the third-month deadline. File form 2746 every year before 15 May so the 3% tax never lands. Write an exit into the articles \u2014 consent majorities, pre-emption, valuation method \u2014 before the family needs it. Elect English law expressly in matching wills, map the forced-share exposure of each child, and value the shares realistically for duties. At every stage, a wrong bill is not the end of the story: the r\u00e9clamation, then the court, give British owners the same remedies as French ones. The families who fare worst are not those with the most complex affairs but those who discover the deadline after it has passed.<\/p>\n Telephone consultation within 48 hours with a lawyer of the firm. Call +33 6 46 60 58 22<\/a> or write via our contact page<\/a> with your assessment notice or draft articles attached.<\/p>\n","protected":false},"excerpt":{"rendered":" British family SCI after Brexit: income tax or company tax, the annual 3% bill and form 2746, selling shares, succession law and forced heirship \u2014 with remedies.<\/p>\n","protected":false},"author":251031309,"featured_media":4170,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kj_source_type":"","_kj_official_id":"","_kj_official_url":"","_kj_judilibre_id":"","_kj_jur":"","_kj_lieu":"","_kj_chambre":"","_kj_rg":"","_kj_date":"","activitypub_content_warning":"","activitypub_content_visibility":"","activitypub_max_image_attachments":4,"activitypub_interaction_policy_quote":"anyone","activitypub_status":"federated","footnotes":""},"categories":[80312,80314],"tags":[],"class_list":["post-2124401","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-british-desk","category-decryptage"],"yoast_head":"\nB. The annual 3% tax: who pays, the disclosure that exempts you, and how to fight back<\/h3>\n
II. Selling, splitting and passing on the SCI: shares, deadlock and death<\/h2>\n
A. Selling the house or the shares: gains, the non-resident levy and the consent lock<\/h3>\n
B. When a partner dies: which succession law applies, the forced share and French death duties<\/h3>\n
Conclusion<\/h2>\n
Need a quick opinion on your case<\/h2>\n