Can a French SCI subject to corporate income tax (IS) make a property available to one of its shareholders free of charge? Contrary to a common assumption, this practice is not without risk. Where the SCI is subject to IS, the tax authorities may take the view that such an arrangement constitutes an abnormal act of management, on the grounds that the company is voluntarily foregoing rental income without any consideration in return.

The consequences can be significant: reintegration of a notional rent into the SCI's taxable profit, a tax reassessment, and potentially further consequences for the beneficiary shareholder depending on the circumstances. Before making any property owned by a corporate-tax SCI available free of charge, it is therefore essential to assess the legal and tax implications carefully.