Can we close SCI as no longer suits plans?

Because my wife and I each have children from previous marriages, we bought our French house through an SCI. However, as the rules have changed and we can now opt to have our UK wills apply in the event of death, the SCI is no longer necessary. How difficult is it to close and revert to owing our home in our own names?

Hon. avocat Gerard Barron replies: “I have dissolved two SCIs for this very reason. Based upon the French Ministry of Justice’s opinion that the inheritance regulation may benefit nationals of all EU member states wherever they are resident (including British residents notwithstanding the UK’s opt-out) and if avoidance of French rules of inheritance was the only reason you used an SCI – other reasons may include estate planning and/or ease of management of French property assets, then opting by will for the law of one’s nationality, such as English law, to apply to one’s estate does do away with the SCI’s usefulness.

The SCI may be dissolved and its assets distributed to shareholders in proportion to their shareholdings by a resolution adopted in a notarial deed or subsequently filed with a notaire.

The notaire will charge a fee according to the value of the property.

The duty is, however, limited to the droit de partage currently charged at 2.5% on the net asset distribution.

The amount of duty therefore depends on the value of the property and on the SCI’s net value – ie taking into account any debts.

If the owners can show they loaned the SCI money to purchase the property (or for its upkeep) then the SCI may reimburse their loan(s) free of duty before the net asset distribution and only pay duty on the balance of market value after deduction of the amount of the loan(s).