Shares in a company are considered to be movable property and the transfer of shares in a (French or English) company on the death of their owner is governed by the law of the deceased's domicile.
If the owner is domiciled in the UK this could avoid the potential problem of reserved rights of children or parents. Care should be taken in providing for the transfer of shares if one is to avoid having to share the property with strangers. To have the option of purchasing as a company, a substitution clause should be included in the initial contract.
The three main types of corporate structure used to acquire property are:
UK company (limited liability)
Although it is possible to purchase through an English limited company, for example, it is not usually advisable. If a resale of the property is possible, there are tax disadvantages in the ownership of property in France by a non-resident company.
It is also possible that you would need to have the Memorandum and Articles of Association translated and a Certificat de Coutûme prepared. Costs of translating such a document could be in the region of £400-500+.
Offshore company
From a fiscal point of view, it is not often advantageous for most purchasers to buy via an offshore company, which would be liable to 3% tax per annum on the market value of the property it owns in France. In addition, the company will pay French corporation tax (normally at a rate of 42%) on any rental income it obtains from the property and the property is likely to be regarded as a permanent establishment of the foreign company. It would therefore be liable to an annual corporation tax.
Société Civile Immobilière (SCI)
Most people purchasing through a company opt to form this type of company.
A SCI has no direct equivalent in the UK. It is more akin to a partnership and could be described as a property-holding partnership which is non-trading, has unlimited liability and is usually fiscally transparent. A SCI which lets property furnished loses it transparency and may become liable to corporation tax on any income derived from the furnished letting. The term of the company may not exceed 99 years and the address of the registered office must be in France. There should be a minimum of two shareholders (associés). It is fairly simple to run and should you wish to sell the property, you could transfer the shares to the new owners if they wanted to acquire the company with the heirs of the other associés. A transfer tax (currently 5.09 %) would be payable.
If you intend to move to France permanently but wish to avoid any possibility of having to share your property it might still be to your benefit to form a SCI. Provision to restrict the transfer of shares could be made in the Articles of Association (Statuts).
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