Using an SCI to Pass On French Property: A Guide for UK Expats

• An SCI (Société Civile Immobilière) holds property on behalf of its shareholders — so instead of owning a fraction of a house, your heirs own shares in a company that owns the house
• This makes gifting gradual and flexible: parents can give away shares in stages, using the same tax-free allowances every 15 years, rather than gifting the whole property at once
• It avoids the classic co-ownership deadlock where a single heir can force a sale — though a 2026 law reform has already made that deadlock easier to break even without an SCI
• It isn't free: expect notaire and setup costs plus ongoing accounting, and — for non-residents — the property is still counted for French wealth tax (IFI) regardless of the SCI wrapper

If you're planning to leave French property to more than one person — children, or anyone else — an SCI is one of the most commonly recommended structures for doing it cleanly. It doesn't reduce your tax bill by itself, but it changes how a property is owned and passed on in ways that can matter a great deal in practice.

What an SCI actually is

An SCI is a civil company (not a commercial one) set up specifically to hold and manage real estate. Once a property is placed inside it, nobody owns "a third of the house" or "half the house" directly — instead, they own shares (parts sociales) in the company, and the company owns the property.

This distinction sounds abstract, but it has real practical consequences. Shares are far easier to divide, gift in stages, and transfer than a physical building is. You can give away 10% of a company's shares in a way you simply cannot give away 10% of a staircase.

The main reason people use one: avoiding indivision deadlock

When property is inherited jointly under ordinary co-ownership (indivision), French law requires the agreement of every co-owner to sell it. Under Article 815 of the Civil Code, nobody can be forced to remain a co-owner indefinitely — but getting everyone to actually agree, especially among siblings or a mixed family, is a frequent source of conflict. One reluctant, absent, or simply difficult heir can hold up a sale for years.

An SCI sidesteps this. The company's own statutes (its constitution) set the rules for decisions — how much of a majority is needed to sell, who manages the property day to day, and so on. That's decided once, calmly, when the SCI is set up, rather than negotiated under pressure after a death.

Worth knowing: a 2026 legal reform (Law 2026-248, in force from April 2026) made it somewhat easier to break an ordinary indivision deadlock even without an SCI — heirs representing at least two-thirds of the ownership can now push through a sale via a notaire-led process, and in some cases even a single co-owner can seek judicial authorisation to sell. This doesn't eliminate the case for an SCI, but it's worth knowing that the "an heir can block everything forever" framing is less absolute than it used to be.

Gifting shares gradually, using the 15-year allowance

This is the SCI's other major use in estate planning, and it pairs naturally with the gifting rules covered in our general guide to how inheritance tax works in France.

Each parent can gift up to €100,000 to each child tax-free, and that allowance resets every 15 years. Gifting a physical house in stages using this allowance is awkward — you'd be gifting oddly-shaped fractional ownership of a single building. Gifting shares in an SCI that owns the house is straightforward: give away a tranche of shares roughly equal to €100,000 in value now, then another tranche 15 years later, and so on, all using the same allowance repeatedly over time rather than triggering full tax on the property's whole value in one go.

This is why SCIs set up for estate planning are often called SCI familiales — the structure exists specifically to let a property be handed down to the next generation gradually, on a schedule the parents control.

Take a €400,000 property gifted to one child, either all at once or as two €200,000 tranches 15 years apart:

The saving comes entirely from using the €100,000 allowance twice instead of once — the SCI just makes splitting a single property into gift-sized tranches practical.

Combining an SCI with usufruit and nue-propriété

An SCI's shares can themselves be split into usufruct and bare ownership, the same démembrement technique covered for direct property gifts in our guide for those with no children. Parents keep the usufruct of their shares — meaning they keep the rental income or the right to live in the property, and keep effective control if they remain the SCI's manager (gérant) — while giving away the bare ownership.

The bare-ownership share is valued at a discount to full share value, based on the parents' age at the time of the gift (Article 669 of the CGI), so less tax-free allowance gets used up for the same eventual outcome. When a parent dies, their usufruct over their remaining shares ends automatically, and the children's nue-propriété converts to full ownership with no further tax due on that step.

Combining fractional, staged gifting with usufruct in this way is generally the most tax-efficient route through an SCI — but it's also the most involved to set up correctly, and mistakes in the statutes or the gifting schedule can undermine the whole plan. This is not a do-it-yourself structure; get it drafted by a notaire.

What it costs and what it doesn't solve

An SCI is not free to set up or run, and it does not, by itself, reduce the amount of tax eventually paid on a gift or inheritance — it changes the mechanics of how that transfer happens, not the underlying tax rates covered in our general inheritance tax guide.

Setup costs: company registration is a modest fixed fee, but drafting the statutes properly — especially if a notaire is involved, which is generally advisable and becomes necessary if the property itself is contributed at formation — typically runs from around €1,500 upward, depending on complexity.

Ongoing costs: an SCI needs its own bank account and, in most cases, its own accounting — either handled personally or through an accountant, commonly a few hundred to over a thousand euros a year if outsourced. An SCI that simply holds a family home for personal use has lighter obligations than one earning rental income, which has its own tax filing to manage on top.

What it doesn't change: for non-residents, an SCI holding French property is still counted toward French wealth tax (IFI) if your total French real-estate wealth exceeds the threshold — the SCI wrapper doesn't remove the property from that calculation, only the proportional value attributable to your shares. Impôts.gouv.fr confirms that non-residents are taxed on French real estate held directly or through companies like an SCI, valued proportionally to the property rights represented. For more on how IFI works generally, see our French Wealth Tax guide.

Common mistakes

1. Assuming an SCI reduces the tax bill on its own. It doesn't change the underlying gift or succession tax rates — it changes how and when a property can be transferred, which is what creates the tax-planning opportunity when combined with staged gifting and usufruct.

2. Setting one up without proper statutes. The whole benefit — avoiding indivision deadlock — depends on the statutes clearly setting out decision-making rules. Badly drafted or copy-pasted statutes can leave the same deadlock problems an SCI is meant to solve.

3. Forgetting the ongoing admin. An SCI isn't a one-off setup cost — it needs a bank account, records, and often annual accounting for as long as it exists. Underestimating this is a common source of regret.

4. Believing it removes the property from IFI. For anyone over the French wealth tax threshold, the property's value inside an SCI still counts, proportionally, toward that calculation.

5. Setting one up too close to death. Like direct gifting, the tax benefit of staged share transfers depends on time passing between each gift and the eventual death — an SCI created and gifted from in someone's final years captures little of the benefit.

Frequently Asked Questions

Does an SCI reduce French inheritance tax?

Not directly. An SCI doesn't change the underlying gift or succession tax rates. What it enables is gifting a property's value in stages, using the same tax-free allowance repeatedly every 15 years, and combining that with usufruct/nue-propriété splits — which together can significantly reduce the tax eventually paid, but through the gifting strategy, not the SCI structure itself.

Does an SCI stop an heir from forcing a sale?

It significantly reduces that risk, since decision-making rules are set out in the company's statutes rather than requiring unanimous agreement as under ordinary co-ownership. It's worth knowing that a 2026 legal reform also made it somewhat easier to break a standard indivision deadlock even without an SCI, so the gap between the two situations is narrower than it once was.

How much does it cost to set up an SCI in France?

Registration fees are modest, but statutes drafted by a notaire — generally advisable, and necessary if property is contributed at formation — typically start around €1,500. There are also ongoing costs: a dedicated bank account and, in most cases, accounting, which can run from a few hundred to over a thousand euros a year if outsourced.

Does holding property through an SCI avoid French wealth tax (IFI)?

No. The proportional value of French real estate held through an SCI still counts toward IFI if your total French property wealth exceeds the threshold. The SCI wrapper changes how the property is owned and transferred, not whether it's counted for wealth tax.

Is an SCI only useful for people with children?

No — while it's most commonly discussed as a tool for parents gifting to children (an SCI familiale), the same structure works for gifting to any intended heirs, and the indivision-avoidance benefit applies to any group of co-owners, related or not.

For more on this topic, browse our Inheritance & Succession Tax category.

Sources: Article 815, Code civil (indivision, right to force partition) · Article 669, Code général des impôts (usufruct/bare-ownership valuation scale, applied to SCI shares) · Article 779, Code général des impôts (parent-child gift allowance) · impots.gouv.fr — non-resident IFI (SCI shares in the wealth tax base)