Valuing SCI shares in a French inheritance or gift: the method

The deceased held shares in a family SCI (société civile immobilière, a French property-holding company), or your clients wish to give shares to their children. The deed must state a value, and that value will be read by the French tax authority, sometimes by an heir who feels short-changed. Declaring a pro rata share of the value of the buildings is almost always wrong; declaring a flat 30 % discount is almost always reassessed. This guide describes the method, the discounts accepted, the points to watch on liabilities, and what the report must contain so that the notaire (French civil-law notary) can use it as it stands.

What happens in practice

The notaire in charge of the estate or the gift asks for a value of the shares. He has the articles of association, the latest balance sheet and, often, an estimate of the buildings provided by the family. He must file the inheritance tax return within six months of the death, or sign the deed of gift, with a value per share.

The tax authority then checks the consistency between the declared value of the buildings and comparable sales, the existence of the debts deducted and the justification of the discounts. In case of disagreement, it serves a tax reassessment notice (proposition de rectification), the discussion continues before the departmental conciliation commission, then before the judicial court. The limitation period for reassessment is long, and the burden of demonstrating the value adopted lies with the person who declared it. In a gift, the value stated in the deed also serves later for the hotchpot (rapport) or abatement (réduction) in the donor’s estate, except in a donation-partage (gift with distribution among the heirs).

The expert steps in before the deed, to give the notaire a value per share, reasoned building by building, or afterwards, to answer a reassessment.

What French law says

Actual market value. For the assessment of gift and inheritance tax, assets are valued at their actual market value on the day of the transfer (article 761 of the French General Tax Code). The Cour de cassation (the French supreme court for civil and commercial matters) applies this text to SCI shares: their value “must be assessed by taking into account all the elements that make it possible to obtain a figure as close as possible to the one that the normal interplay of supply and demand would have produced” (Cass. com., 9 July 2025, appeal no. 24-13.540, translated from the French). The tax authority may reassess when the declared value is lower than the actual market value (article L. 17 of the Book of Tax Procedures).

Discounts accepted. In the case decided on 9 July 2025, two discounts of 10 % had been adopted, one for the illiquidity of the assets, the other for the illiquidity of the shares. The taxpayer asked for two more, including one for “joint ownership”. The Court approves the refusal: the position of an SCI shareholder is not that of a co-owner in indivision, he can transfer his shares subject to approval, a constraint already taken into account by a specific discount. I commented on this ruling in SCI shares and wealth tax: two 10 % discounts, not a third.

The nature of the share. Unless otherwise provided, shares may only be transferred to a third party with the approval of all the shareholders (article 1861 of the French Civil Code), and each shareholder is liable for the company’s debts in proportion to his share (article 1857). These two rules found the discount for the illiquidity of the shares.

The civil law dates. For the hotchpot of gifts in the estate, the asset given is valued at the date of partition, according to its condition at the time of the gift (article 860). For abatement, the estate is calculated according to the condition at the date of the gift and the value at the date of death (article 922). A donation-partage freezes values at the date of the deed under conditions (article 1078). The report must therefore state the valuation date adopted and, if the deed requires it, provide a second value at another date.

The professional framework. The valuation of company shares is a specialism identified by the Charte de l’expertise en évaluation immobilière (the French property valuation charter, 6th edition, November 2025, Title II, § 8.5); valuation for tax purposes is covered in § 8.14; the market value of buildings is defined in Title III, § 1.1. Sub-heading C.18.3 of the national nomenclature of court experts covers shareholdings in companies whose assets are mainly property.

What a valuation report changes

The report follows a chain that the notaire can take up line by line.

1. Market value of each building at the date of death or of the gift, after inspection, with its comparables. A let building is valued with its leases; a property occupied free of charge by a shareholder is analysed differently.
2. Restated balance sheet: book assets replaced by market values, cash and receivables added, liabilities deducted, including loans, tax debts and shareholder current accounts.
3. Restated net asset value, then the mathematical value of one share.
4. Discounts, each named, justified by the articles of association and the situation of the company, quantified, without double counting: illiquidity of the assets, illiquidity of the shares, minority where applicable. Latent tax is examined and retained or set aside with reasons.
5. Unit value and value of the holding, as a range and as a single figure.
6. A separate line for the current account of the deceased or the donor.
7. A one-page summary note for the deed, and complete appendices for any future audit.

What the report does not do: it does not replace the tax return, which remains the parties’ own, and it does not decide questions of civil law, hotchpot, abatement, classification of a gift. It gives the notaire the values corresponding to each assumption. The general method for valuing SCI shares and the discounts accepted in an inheritance are detailed in two articles.

A worked example

A family SCI owning an investment building in BREST. The deceased held 500 shares out of 1,000. Market value of the building after inspection: €800,000. Cash: €10,000. Outstanding loan: €150,000. Shareholder current accounts: €60,000, of which €30,000 in the name of the deceased.

Restated net asset value: 800,000 + 10,000 minus 150,000 minus 60,000 = €600,000, that is €600 per share. Without any discount, the 500 shares would be worth €300,000. With a 10 % discount for the illiquidity of the assets then 10 % for that of the shares, justified by the unanimous approval clause and the absence of any distribution for five years, the share is worth €486 and the holding €243,000. The difference of €57,000 represents, in the 20 % bracket of the scale for transfers in the direct line, €11,400 of tax. The current account of €30,000 is declared separately, at its nominal value.

If the family had declared 50 % of the building, that is €400,000, it would have paid tax on €157,000 too much. If it had applied a 30 % discount without reasons, the tax authority would probably have reassessed.

Common mistakes

• Declaring the pro rata share of the buildings. A share is a right in an indebted company, not a fraction of a building.
• Forgetting the liabilities or, conversely, deducting the deceased’s current account from the value of the shares without declaring it as a receivable.
• Applying an overall discount without reasons. This is the typical case of reassessment; what holds up is the reasoning, not the percentage.
• Stacking discounts that compensate the same handicap: approval clause, absence of a market and “joint ownership” cover the same constraint on transfer.
• Taking an old building value, or an estimate without inspection, as the basis of the net assets. The whole chain depends on it.
• Leaving out the date: a value at the date of death is not a value at the date of partition.

What to gather

• The up-to-date articles of association and, if there is one, the shareholders’ agreement; the share transfer register.
• The last three balance sheets and tax returns, the ledger of shareholder current accounts.
• The title deeds of the buildings, current leases, property tax notices, surveys and certificates.
• The deed of notoriety or the draft deed of gift, with the desired valuation date.
• The loan amortisation schedules.
• The minutes of shareholders’ meetings for the last three years, in particular on distributions and transfers.
• Earlier valuations and, in case of an audit, the tax reassessment notice.

Timeframe and fee

The valuation of shares is delivered about four weeks after receipt of the accounts and the articles of association, inspection of the buildings included. It is charged on time spent, €65 per hour; for shares in an SCI holding a single building, most often from €1,300, travel not included, charged at €65 per hour or part hour from PONT-L’ABBÉ. A 50 % deposit is requested on signature of the valuation contract. VAT not applicable, article 293 B of the French General Tax Code.

The content of the report is on the Business, SCI shares and company shares page and the fee scale on the Fees page.