The use of a société civile immobilière to buy French property can make good sense, but only in certain circumstances.

We get a fairly regular stream of enquiries into the office from those of you thinking of using an SCI to buy French property, or those of you who have actually set one up, and have questions about its operation.

An SCI is simply a particular form of company structure used to purchase French property.

In concrete terms the company buys the property from funds provided by one or more shareholders of the company.

The use of such a structure is most appropriate for:

• Couples who are not married or in a civil partnership;
• Couples married, but with children by a previous marriage;
• Purchase of the property amongst friends or an extended family

The main reason why it is useful in these cases is because it gets around the enforced rules of French inheritance laws.

There are also a number of other potential tax advantages, although these are not automatic.

In addition, if you are proposing to purchase with a mortgage, then you may find lenders reluctant to lend to a company, or that it is more expensive to do so.

If you propose to set up an SCI you need to get the advice of a good notaire and/or solicitor with a strong familiarity with this type of legal structure.

In order to avoid later substantial transfer costs, you also need to set up the company before you actually buy the property, or do so as part of the purchase process.

Florence Richards, a French property and tax adviser at Furley Page Solicitors says,''Although in certain circumstances an SCI can be a good tool to override the application of the stringent French forced heirship rules, or to transfer the property to your intended beneficiaries, it must be used with caution"

''Before the company is set up, it is important to ensure that this structure will meet all your requirements, notably with regard to the management of the company, and you should seek professional advice on the drafting of the company articles (known as 'statuts').

You need to also be aware of the tax consequences of the use of an SCI - both in France and in your country of residence - and all company obligations. The French tax authorities have recently increased their monitoring of SCIs held by non-residents and some tax efficient schemes, notably with regard to wealth tax, have been tightened up in the last few months."

You can read more in our recently updated and comprehensive guide to a Société Civile Immobilière (SCI).