In order to avoid corporate tax, it is advisable to use French forms of company that are not treated as commercial trading companies. Most commonly known among these is the SCI (société civile immobilière), which is fiscally transparent, so that liability for tax on the company’s income and gains falls on the shareholders.
The main advantages of using an SCI, if a company has to be used at all, are that:
- French succession law is avoided if the shareholder dies domiciled in the UK
- The company is not subject to the annual minimum payment of French corporation tax and the shareholders benefit from the favourable tax treatment of capital gains realised by individuals.
However care needs to be taken from a UK perspective – the shareholders should check with their local tax office in the UK to establish how any revenue would be assessed to UK tax