French money news update: SCIs, S1s, joint Revolut accounts

Article updated July 14, 2023 (published June 7, 2023)

SCIs not right for all

Creating an SCI property holding company is not automatically a good way to own property, as many people believe, experts have warned.

Wealth management specialists, quoted in Le Figaro, say many families have vaguely heard that this ‘saves money’ – but this is not necessarily so, they say, although it can be a useful way to manage a property among several owners.

In particular, the experts said, you should not use this option without taking advice and understanding why you are doing it.

Many people think they can pay less tax in the case of renting out as there is an option for paying corporation tax instead of income tax, which might be lower for owners with high revenues.

However, in this case, banks are liable to see this as requiring a ‘professional’ mortgage, which can be more difficult to obtain, plus there will be no benefit to any associates on modest incomes.

Also, if you rent out a property owned by an SCI and sell it later, taxation of the capital gains can be several times more than if you sell it as a privately-owned home, according to François-Xavier Soeur of Terrae Patrimoine.

He advises, in the case of renting out, to look at changing to another structure called a SARL familiale.

Another issue is the fact that SCI associates have unlimited liability for debts of an SCI (in proportion to their input into the capital).

Setting up an SCI can also be a long and costly process, involving a notaire or avocat to draw up statutes and often an accountant to keep accounts

Joint bank accounts at Revolut

Online bank Revolut, used by two million people in France, now offers joint accounts to its customers across the European Economic Area.

People taking these out will not be asked to prove they are a couple or that they live together, so the accounts can be used by friends, family members or colleagues.

As with classic Revolut accounts, standard joint accounts will come with a ‘virtual bank card’, which provides numbers that can be used for online payments, but no physical card.

S1 and French pensions

We looked in May at renouncing, or not taking, a French pension so as to use a UK S1 form for healthcare, which can give reduced French social charges on some kinds of income for people who make French income tax declarations.

Official French experts on international social security coordination Cleiss, and French pension bodies, said that it is possible (though the national body for Cpams - Cnam - did not respond to our queries, nor did government social security department la Direction de la sécurité sociale), however we did not have confirmation from the UK that the practice is acceptable.

Official UK sources now confirm that this is a matter for France, though people should take advice before potentially giving up an entitlement permanently.

People in France are entitled to have, and use, a UK S1 if they are not receiving a French state pension or similar eligible benefits entitling them to care via France.

However, note that there can be benefits of healthcare via France, including the right to a French Ehic, which can be used for free care on visits to the UK.

Another was the right the CSS healthcare top-up scheme for those on low incomes, an entitlement which temporarily stopped during 2022 and part of 2023, however it has now been confirmed that people insured via S1 forms are now eligible again for the CSS.

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