Purchasing an SCI, what do you get?

I am in the midst of purchasing an place in France that is already held in an SCI.
My understanding after extensive reading and ‘discussion’ with the estate agent and seller is that the SCI owns the property and so for tax reasons its beneficial to the seller to sell the SCI rather than the property directly. The seller has reduced the price significantly based on their tax savings. They are apparently both lawyers/attorneys or something so I am comfortable that its above board.
Now of course my understanding is based on my thinking its somewhat like a LLC or S-Corp but more set up to avoid inheritance problems rather than avoid liabilities.
My question is, typically what is included when purchasing an SCI held property? And in normal day to day operations what does the SCI typically pay for?
For instance would buying the SCI then include the bank account registered/owned by the SCI?
Would the SCI typically be paying the water and electricity bills?
Does the SCI pay the taxes and insurance?

Thanks for your thoughts.

Are you using a Notaire (of your choosing)… if not, I would suggest you get one on board.

This is very confusing.
The property is owned by an SCI. So the seller, is the SCI.
An SCI is a company that consists of a number of shareholders.
When you talk about the “seller”, are you in fact referring to one of the shareholders?
An individual can’t “buy” an SCI because an SCI needs at least two shareholders Two people could between them buy up all the shares from the current shareholders. And then those two people would in a sense own the SCI.
And then, those two people would own the property that is owned by the SCI.
Or that is how it seems to me.

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Notaire or avocat?

I thought that the Notaire’s job was to ensure that the transaction was carried out according to the law and title was properly conveyed and not as an “advocate” for either party, and that this did not change all that much if each side appoints their own.

If @FireinFrance is UK based then there are a number of UK based solicitors who might be able to help - we used Heslop & Pratt who were “OK” but might well be more use in a complex situation like this.

Search the forum *thoroughly* and there are some recommendations regarding firms.

Husband and wife?

I suggested a Notaire as it is a Notaire who deals with property sales/purchases…
Any Notaire will say if this particular situation is outside their remit…

I was merely suggesting a Notaire of his own choosing, as so many others do… when/if the situation might be a bit complex.

Buyer and Seller can have different Notaires… it is not unknown… I’ve been a fly-on-the-wall several times in such circumstances.

Yes that would work but FireinFrance said I, not We.

True in which case an SCI would not be the appropriate vehicle.

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Not unknown but not usual and I thought that the Notaire’s role was limited to “is this legal” not “is this a good idea”. It’s a completely different role to a UK property solicitor who spend most of their time on the contractual side, not merely the transfer of title.

A good notaire will explain all the implications to both parties so that they can decide for themselves if it’s a good idea for them or not. He or she has a duty to make sure that that when a contract is signed both parties understand the terms of the contract they are signing.

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Forgive my cynicism for I am old and crotchety but the bulk of the world’s population should not be trusted with a decision more portentous than what to wear or what to have for breakfast (present incumbents excepted, of course). Legal niceties around complex contracts are beyond the average ken.

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Frankly, one should not enter into this sort of transaction without professional, independent tax and legal advice. The fact that the vendors are “lawyers/attorneys” would make me more concerned, not less. The notaire just processes the property transfer and makes sure all taxes are paid (which is his her primary function).

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It seems very similar to the sort of structure recommended by a firm (including an ex-tax inspector) I used to work for in the UK as part of money management / tax advice to their clients who were often families who owned medium sized businesses.

Behind it would for example be a holding company owning the say, UK company that owned the property :
that holding company based in a tax haven. Often Jersey in the case of the client manager whose solutions I saw. Transferring only the shares in a company that owns a property, snd leaving the property ownership unchanged (ie still owned by the company), has obvious advantages if share transfer has other advantages eg costs less (no stamp duty for property transfer). Even though there would be other charges and things to take care of.

This can also work well for inheritance for similar reasons.

However once a sale is made outside the family obvs you wouldn’t have quite the same level of trust.

@John_Scully is right this may be OK but caution is needed. Their structure must work for you if you take the company.

I would 100% start by employing my own notaire and ask them to explain this structure and check if it works for you. Your notaire will be able to suggest an adviser (likely a tax adviser) if something is outside their own competence.

My gut feeling is that so long as you don’t become tax resident in France this could work for you. Except you might have the same problem on selling it…and owning a French or a Dutch Antilles-based company may be onerous for you. Best for you might be to decline the offer to take the company, and insist that the company sells the property to you. I can’t see them liking that so much but you must do what protects you. Start with getting your own notaire preferably local(ish) - they might know the background to this structure or be able to find out from their contacts.

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@KarenLot explained much better than I did. My wife is actually the financial guru here so she understands what’s going on.
My question was more about if we will need to go through the hassle of setting up utility accounts and bank accounts or we can just inherit the existing accounts when we purchase the SCI.

My understanding is that you can’t set up a bank account without property and the best way to prove you are a property owner is to have an electric bill. And you cant set up and pay an electric bill without a bank account. Catch-22? Is it really that bad?

You should be able to set up a bank account first if it is in order to buy property. If you are a Brit look at e.g. CA Britline.

The SCI is not being closed though is it, all that is happening is that its shareholders are changing, which is perfectly normal for an SCI, shareholders can change frequently. So there is no obvious reason why the existing accounts should be closed , they are not normally closed every time there is a change in shareholders. You simply change the authorised signatories on the accounts, which no doubt will all be arranged as part of the purchase process.
Unless the current owners pay some of the bills out of their personal accounts, but even if they do you could always transfer them to the SCI bank account after the purchase.

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I’ve no personal experience of SCIs but I wonder if one is in effect buying a company why is a notaire involved at all? You are really just buying shares.

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…not sure if that’s not a typo!!!

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Oops :flushed: Heslopp and Platt, freudian slip methinks.