Contributing co-owned or split-ownership property to an SCI
Not every property contributed to an SCI (société civile immobilière) is owned outright by one person. Often it is held in indivision by several co-owners - typically after an inheritance - or its ownership is split between a usufructuary and a bare owner. Bringing such a property into an SCI is a common and powerful move: it replaces a fragile indivision with a governed structure, or it turns a split ownership into a vehicle that can be managed and passed on. But the rules differ sharply from an ordinary contribution, both on who must consent and on the tax. This guide sets out how to contribute an undivided share or a whole co-owned property, and how a split-ownership (démembrement) contribution works, including the transmission advantage that makes it a favourite of estate planners.
These are among the most useful restructurings an SCI can carry out, and among the easiest to get wrong. Contributing the whole of a co-owned property needs everyone's agreement; contributing split ownership can be tax-neutral or costly depending on how the shares are allocated; and a split-ownership contribution can either secure or forfeit a significant inheritance-tax advantage according to how it is structured. Understanding the mechanics before acting is what turns a good idea - consolidating an inheritance, or preparing a transmission - into a clean and efficient one.
Contributing your undivided share, or the whole co-owned property
Where a property is held in indivision, the rule depends on what is being contributed. A co-owner can contribute their own undivided share (quote-part indivise) alone, without the others: the contribution of the share is within the power of the person who holds it. There is, in principle, a preemption right in favour of the other co-owners where a co-owner disposes of their undivided rights to an outsider for value (C. civ. Art. 815-14), but the courts have held that a contribution to a company is not a sale, so that preemption right does not apply to a contribution made without fraud. A co-owner can therefore bring their share into an SCI without offering it first to the others - though the co-owner then holds shares whose rights, if held jointly with others, they cannot exercise alone.
Contributing the whole of the undivided property is different: it requires the unanimous consent of all the co-owners. Article 815-3 of the Civil Code, while allowing certain acts of administration by co-owners holding at least two-thirds of the undivided rights, still requires unanimity for an act of disposal such as contributing the property to a company. So a single co-owner, even a majority one, cannot put the whole property into an SCI over the others' objection - every co-owner must agree. This is the point at which a family reorganisation after an inheritance succeeds or stalls, and it is why the agreement of all the heirs has to be secured before the contribution is planned.
When the whole undivided property is contributed, the shares received in return can be attributed in one of two ways: jointly to all the contributors, so that the shares themselves are held in indivision, or split so that each co-owner receives a number of shares matching their undivided rights. Where the shares are held jointly, each member of the indivision is recognised as a member of the SCI - the quality of member belongs to each co-owner, not to the indivision as such (Cass. com., 21 January 2014, no. 13-10151) - but the rights attached to jointly held shares cannot be exercised by all the co-owners at once, so a representative must be appointed to exercise them. Deciding between joint and split attribution, and setting up the representation, is part of structuring the contribution so the company can actually function afterwards.
Split ownership: what a démembrement contribution is and why it is used
A split-ownership contribution (apport démembré) is the contribution to a company of property whose ownership has been divided between a usufruct and a bare ownership - either split before the company is formed, or split as part of the operation. It is not a niche technique: it sits at the centre of two very common strategies, one looking forward to a transmission and one looking back to settle an inheritance.
The first strategy is transmission with retained control. A parent who wants to pass wealth to their children, but to keep control of it, may prefer to the direct gift of a property's bare ownership the gift of shares in a company to which they have contributed that bare ownership and in which they act as manager. The split ownership lets them anticipate the transmission of the property without losing either the financial benefit - as usufructuary they keep the income - or the direction of the asset, which they retain as manager of the SCI. The children receive, in time, the value; the parent keeps the income and the control. This is the backbone of the family SCI used for succession planning.
The second strategy is reconstituting full ownership. A death often leaves a property split, with the surviving spouse holding the usufruct and the children the bare ownership - a division that makes the property awkward to manage and to sell. The usufructuary spouse and the bare-owner children can jointly contribute their respective rights to a company, so as to reunite in the company's hands the whole of the prerogatives attached to ownership. Instead of an unwieldy split property, the family then holds shares in a company that owns the property outright and can manage or dispose of it on ordinary majorities. The split-ownership contribution here is a tidying operation, turning a fragmented ownership into a manageable one - and, as the next section shows, how the shares are allocated in exchange decides whether that tidying is tax-neutral or carries a cost.
What are you contributing - a share, the whole, or split ownership?
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You can contribute your share alone
A co-owner can contribute their own undivided share alone, and the co-owners' preemption right does not apply to a contribution, which the courts do not treat as a sale (C. civ. Art. 815-14). You then hold shares whose rights, if held jointly, need a representative to exercise. We structure the contribution and the representation so it works.
Everyone must consent - unanimity required
Contributing the whole undivided property is an act of disposal needing the unanimous consent of all the co-owners (C. civ. Art. 815-3); a majority cannot impose it. The shares can be held jointly or split per each co-owner's rights, with each recognised as a member (Cass. com., 21 January 2014). This is the classic post-inheritance consolidation - we secure the consents and structure the shares.
A transmission tool - you keep income and control
Contributing the bare ownership to an SCI where you are manager and usufructuary lets you anticipate the transmission while keeping the income and the direction of the asset; the children later hold the value through the shares. The allocation of shares and the usufruct valuation drive the tax, and there is a valuable inheritance-tax point to secure. We design the structure and the gifting that follows.
Reuniting ownership - mind how the shares are allocated
The usufructuary and the bare owners can jointly contribute their rights to reunite full ownership in the company. But how the shares are allocated decides the tax: full-ownership shares by exchange carry a duty, while carrying the split over onto the shares can be neutral, subject to a debated point. We model the allocation before the deed so the reunification is done efficiently.
The tax of a split-ownership contribution
How a split-ownership contribution is taxed turns on how the shares are allocated in exchange for the rights contributed. Where the bare owner and the usufructuary make a joint contribution - which amounts to contributing the full ownership of the property - the contribution is in principle remunerated by full-ownership shares, ending the split. But the parties may, by agreement, provide instead for the split to be carried over onto the shares by the mechanism of real subrogation, so that the usufructuary receives usufruct of the shares and the bare owner the bare ownership of them.
The distinction has a real cost. Where the usufructuary and the bare owner each contribute their right and receive full-ownership shares in return, the tax doctrine analyses the operation as an exchange - the usufructuary taking the usufruct of the bare owners' shares and the bare owners the bare ownership of the usufructuary's shares - and an exchange is a transfer for value, so it carries a duty (the 5% share-transfer duty of CGI Art. 726, I, 2°). Where, by contrast, the split is carried over so that each contributor is paid in shares of the same nature as the right they contributed - usufruct for usufruct, bare ownership for bare ownership - the carry-over of the split is, in principle, fiscally neutral. That neutrality, however, rests on the validity of the "remembrement", on which doctrine is divided and the courts have not ruled, so the neutral route carries an element of uncertainty that has to be weighed. Where a usufruct or a bare ownership is contributed on its own, in isolation, the contributor is simply paid in full-ownership shares and subrogation does not apply.
Valuation adds a further layer. For the balance sheet, the parties are free to fix the market value of the rights contributed, provided it reflects economic reality. But for the registration duty, the fiscal value from the statutory scale is used in every case. Where the usufruct is created on the contribution - detached from the full ownership at that point - it is a fixed-duration usufruct, whose term cannot exceed thirty years (C. civ. Art. 619), and its value is 23% of the value of the full property for each ten-year period of its duration, without fraction and regardless of the usufructuary's age (CGI Art. 669, II) - capped so that it cannot exceed the value a life usufruct would have. And a point that catches income-tax contributors: the proceeds of the first disposal for value of a fixed-duration usufruct are taxed at the progressive income-tax scale as categorical income (CGI Art. 13, 5). These valuation and characterisation rules are where a split-ownership contribution is priced, and they should be modelled before the deed rather than discovered in the assessment.
Split-ownership contribution: what to check
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It depends on how the shares are allocated
Contributing usufruct and bare ownership for full-ownership shares is analysed as an exchange - a transfer for value carrying the 5% share duty (CGI Art. 726, I, 2°). Carrying the split over onto the shares, so each is paid in the same nature of right, is in principle neutral, but rests on the debated validity of the "remembrement". We model both routes and their risk before you choose.
By the statutory scale, not just the market value
For the balance sheet the parties can fix a market value that reflects reality, but for the duty the fiscal scale applies. A usufruct created on the contribution is a fixed-duration usufruct - term capped at 30 years (C. civ. Art. 619) - valued at 23% of the full value per ten-year period, regardless of age (CGI Art. 669, II), and cannot exceed the value of a life usufruct. We calculate the fiscal value that will govern the duty.
The fictitious-démembrement presumption can be avoided
An anti-fraud presumption normally treats property held in usufruct by a deceased and in bare ownership by their presumptive heirs as part of the estate. But it does not apply where the bare ownership is contributed to an SCI whose members are those heirs - the bare ownership belongs to the company, not the heir, and the company is not an interposed person (C. civ. Art. 911). This is the transmission advantage - we structure it to secure it.
The usufructuary keeps income and, as manager, control
Contributing bare ownership while keeping the usufruct and the management lets a parent retain the income and the direction of the asset, the children holding the value through the shares. The voting rights on dismembered shares can be arranged in the articles to reinforce the usufructuary's control. We draft the articles so the control and income sit where you intend.
The transmission advantage: escaping the fictitious-démembrement presumption
The reason estate planners reach for a split-ownership SCI is a specific inheritance-tax advantage, and it is worth understanding precisely. As a rule, a usufruct extinguishes on the death of the usufructuary without any additional tax on the bare owner, who then recovers the full ownership of the property (CGI Art. 1133). That clean extinction is valuable - but the law guards it with an anti-fraud presumption, to stop families from disguising a gift as a split ownership. The presumption treats property held in usufruct by a deceased and in bare ownership by their presumptive heirs (or descendants of them, or interposed persons) as forming part of the estate for inheritance tax, unless the contrary is proved. Left unaddressed, this presumption can pull a split-ownership arrangement back into the taxable estate.
The decisive point is that the presumption does not apply where the bare ownership is contributed to a company whose members are the usufructuary's presumptive heirs. The tax authorities accept that where the bare ownership belongs to the SCI rather than directly to the heir, the presumption is not engaged: the bare ownership is the company's, not the heir's, and the company is not an interposed person within the meaning of Article 911 of the Civil Code. So a family that holds the bare ownership through an SCI, rather than in the heirs' own names, keeps the clean extinction of the usufruct on the parent's death without the arrangement being presumed a disguised gift. This is the heart of the transmission strategy: the parent contributes the bare ownership to the SCI, keeps the usufruct and the management, and on their death the usufruct extinguishes and the company holds the full ownership - with the anti-fraud presumption disarmed by the very use of the company.
This advantage is real but conditional, and it has to be structured deliberately. The members of the SCI must be the presumptive heirs, the bare ownership must genuinely belong to the company, and the whole arrangement must be set up and documented so that the tax authorities' own position applies to it. Done properly, a split-ownership SCI combines the retained control and income of the usufructuary parent, the anticipated transmission of value to the children, and the clean, untaxed reunification of ownership on the parent's death. Done carelessly, it risks the presumption and the tax it brings. It is, in short, one of the most powerful transmission tools available through an SCI - and one of the ones that most rewards being set up with proper advice.
Contributing co-owned or split-ownership property - at a glance
| What is contributed | Consent / mechanism | Tax |
|---|---|---|
| Your own undivided share | The co-owner alone; no preemption on a contribution | Ordinary contribution rules |
| The whole undivided property | Unanimous consent of all co-owners (C. civ. Art. 815-3) | Shares held jointly or split; each co-owner a member |
| Bare ownership (keeping usufruct) | The bare-owner-to-be contributes; parent stays usufructuary/manager | Full-ownership shares to the SCI; transmission via share gifts |
| Usufruct + bare ownership, for full-ownership shares | Analysed as an exchange | Transfer for value - 5% duty (CGI Art. 726, I, 2°) |
| Usufruct + bare ownership, split carried over | Subrogation onto the shares | In principle neutral, but the "remembrement" is debated |
| Usufruct created on the contribution | Fixed-duration usufruct, term ≤ 30 years (C. civ. Art. 619) | Valued at 23% per ten-year period (CGI Art. 669, II) |
Frequently asked questions about contributing co-owned or split property to an SCI
Can I contribute my share of a co-owned property to an SCI on my own?
Yes. A co-owner can contribute their own undivided share alone, and the other co-owners' preemption right does not apply, because the courts do not treat a contribution as a sale (C. civ. Art. 815-14). Contributing the whole undivided property is different - that needs the unanimous consent of all the co-owners (C. civ. Art. 815-3). So your own share, yes; the whole property, only with everyone's agreement.
Do all the heirs have to agree to put an inherited property into an SCI?
To contribute the whole property, yes. Contributing the entire undivided property is an act of disposal requiring the unanimous consent of all the co-owners (C. civ. Art. 815-3); a majority, even a two-thirds majority, cannot impose it. The shares received can be held jointly or split according to each heir's rights, and each heir is recognised as a member of the SCI (Cass. com., 21 January 2014). Securing every heir's agreement is the first step of a post-inheritance consolidation.
What is a split-ownership (démembrement) contribution?
It is the contribution to a company of property whose ownership is split between a usufruct and a bare ownership. It serves two common aims: transmission with retained control - a parent contributes the bare ownership, keeps the usufruct and the income, and manages the SCI while the children hold the value; and reconstituting full ownership - a usufructuary spouse and bare-owner children contribute their rights to reunite full ownership in the company after a death, replacing an awkward split property with manageable shares.
Does a split-ownership contribution carry tax?
It depends on the allocation of the shares. Contributing usufruct and bare ownership for full-ownership shares is analysed as an exchange - a transfer for value carrying the 5% share duty (CGI Art. 726, I, 2°). Carrying the split over onto the shares, so each contributor is paid in the same nature of right, is in principle neutral, but rests on the debated validity of the "remembrement". The valuation follows the statutory scale for the duty, with a fixed-duration usufruct valued at 23% per ten-year period (CGI Art. 669, II).
How does a split-ownership SCI help with inheritance tax?
A usufruct extinguishes on the usufructuary's death without extra tax on the bare owner (CGI Art. 1133), but an anti-fraud presumption normally treats property held in usufruct by a deceased and in bare ownership by their presumptive heirs as part of the estate. That presumption does not apply where the bare ownership is held by an SCI whose members are those heirs - the bare ownership belongs to the company, not the heir, and the company is not an interposed person (C. civ. Art. 911). So holding the bare ownership through the SCI preserves the clean, untaxed extinction of the usufruct.
How is a usufruct created on the contribution valued?
As a fixed-duration usufruct. Where the usufruct is detached from the full ownership on the contribution, its term cannot exceed thirty years (C. civ. Art. 619), and its value for the duty is 23% of the value of the full property for each ten-year period, without fraction and regardless of the usufructuary's age (CGI Art. 669, II), capped so it cannot exceed the value of a life usufruct. For income-tax contributors, the proceeds of the first disposal for value of such a usufruct are taxed at the progressive scale as categorical income (CGI Art. 13, 5).
Petroff Avocats structures co-ownership and split-ownership contributions for international families - securing the co-owners' consents, allocating the shares between an indivision and a clean split, and designing démembrement contributions so the duty is contained and the inheritance-tax advantage secured. We model the exchange-versus-carry-over choice, value the usufruct on the statutory scale, and set the articles so control and income sit where the family intends. See our SCI service on french-business-law.com, or contact the firm directly.
Talk to a French business lawyerThis article is for general information only and states French law and tax rules as published in the sources available at the date shown above, including the usufruct-valuation and duty rules current for 2026. It does not constitute legal or tax advice. The treatment of a co-ownership or split-ownership contribution depends on the property, the family and the allocation of shares. Always seek qualified legal and tax advice before contributing co-owned or split property to an SCI.
- C. civ. Art. 815-3Unanimous consent of the co-owners required to contribute the whole of an undivided property (an act of disposal)Légifrance
- C. civ. Art. 815-14Co-owners' preemption right on a disposal for value - held not to apply to a contribution to a companyLégifrance
- C. civ. Arts. 619 and 911Fixed-duration usufruct term capped at thirty years; a company is not an interposed person for the anti-fraud presumptionLégifrance
- CGI Art. 726, I, 2°5% share-transfer duty on the exchange of dismembered rights for full-ownership sharesLégifrance
- CGI Art. 669, IIFixed-duration usufruct valued at 23% of the full value per ten-year period, regardless of the usufructuary's ageLégifrance
- CGI Arts. 1133 and 13, 5Extinction of usufruct on death without additional tax; taxation of the first disposal for value of a fixed-duration usufruct at the income-tax scaleLégifrance
- Cass. com., 21 January 2014, no. 13-10151Each member of the indivision contributing a property is recognised as a member of the company, not the indivision itselfCour de cassation
SCI
Your share, or the whole?
A co-owner can contribute their undivided share alone, but contributing the whole property requires every co-owner to act together.
Ask a French LawyerKey Legal References
Unanimous consent of the co-owners required to contribute the whole of an undivided property (an act of disposal)
Co-owners' preemption right on a disposal for value - held not to apply to a contribution to a company
Fixed-duration usufruct term capped at thirty years; a company is not an interposed person for the anti-fraud presumption
5% share-transfer duty on the exchange of dismembered rights for full-ownership shares
Fixed-duration usufruct valued at 23% of the full value per ten-year period, regardless of the usufructuary's age
Extinction of usufruct on death without additional tax; taxation of the first disposal for value of a fixed-duration usufruct at the income-tax scale
Each member of the indivision contributing a property is recognised as a member of the company, not the indivision itself
