Reading time: 4 minutes

Passing on wealth is a key consideration for protecting heirs and optimizing taxation.

A Société Civile Immobilière (SCI) is an effective vehicle for structuring and transferring real estate in a tax-advantaged manner.

Table of Contents

  1. Why Choose an SCI?
  2. Steps to Create an SCI
  3. Tax Benefits of an SCI
  4. Conclusion

Why Choose an SCI?

An SCI (Société Civile Immobilière) is a real estate investment company that offers several advantages for wealth management and transfer. Key reasons to consider creating an SCI include:

  • Simplified Wealth Transfer: Distributing shares over time allows for a reduction in inheritance taxes.
  • Succession Planning: Ensures smooth property management and aligns ownership with estate goals.
  • Flexible Management: Provides shared control among partners, reducing administrative burdens.

Steps to Create an SCI

Creating an SCI involves the following steps:

  1. Define Objectives
    Establish the purpose of the SCI, such as rental investments, family asset management, or inheritance planning.

  2. Draft Articles of Association
    These documents outline the operational rules, partner rights, and asset management policies.

  3. Choose the Taxation Method
    Decide between personal income tax (IR) and corporate tax (IS) based on expected revenue and property usage.

  4. Register the SCI
    File required documents with the Commercial Court or relevant authority to formalize the SCI’s creation.

Tax Benefits of an SCI

  1. Reduced Inheritance Taxes
    By transferring shares gradually through donations, families can reduce the overall inheritance tax burden.

  2. Choice of Taxation Regime

    • Opting for personal income tax (IR) aligns with low rental income or family management.
    • Choosing corporate tax (IS) is better for high-revenue properties and allows property depreciation.

  3. Simplified Asset Distribution
    SCI structures allow for a clear delineation of property ownership, minimizing disputes among heirs.

  4. Amortization
    Corporate taxation permits amortization of real estate assets, reducing taxable profits.

Conclusion

An SCI is a powerful tool for efficiently managing and transferring wealth.

By collaborating with a tax lawyer, you can ensure proper structuring, legal compliance, and optimal use of tax benefits.

For personalized advice, reach out to a legal expert today to secure your estate’s future.

Need Personalized Guidance? Book a 30-minute consultation
Book My Consultation

Disclaimer: The information contained in this article is provided for informational purposes only and should not be construed as legal or tax advice. As each situation is unique, we recommend consulting a professional for personalized advice.