The Council for Compulsory Deductions denounces the inheritance and tax advantages of the retirement savings plan. The body attached to the Court of Auditors recommends regulating the liquidation of the PER, which its subscribers should close at an age limit.
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– The tax and inheritance advantages of the PER seem to be in the spotlight.
The sky is getting darker for the retirement savings plan (PER), which continues to be singled out for the tax advantages it offers to its subscribers. After the deputies who, in a report examined at the end of September, asked to set a maximum age of 67 to open a PER and automatic liquidation of this product at age 70, it is the turn of the Sages to throw a wrench into the pond. In a report published this Monday, October 14, the Council for Compulsory Deductions (CPO), an institution attached to the Court of Auditors, recommends “refocus the retirement savings plan on its retirement savings function by regulating its liquidation age”.
To understand the reasons for this “relentlessness”, let us remember that the retirement savings plan confers several significant advantages on its holders. Because not only does this product aim to grow capital on different supports (euro funds, units of account) with the aim of build additional income for the end of working life, but it also allows you to avoid income tax and inheritance tax. In fact, payments made to a PER are deductible from taxable income up to the double limit of 10% of professional income and 35,194 euros in 2024.
The unsuspected and ultra-effective tax advantage of the retirement savings plan
In return, when the PER is released at retirement age – except for the purchase of the main residence or in certain exceptional cases -, the amount equivalent to the payments is subject to the income tax scale and gains made at flat tax by 30%. “However, in the event that a PER is never liquidated by its holder before his death, the entire right to the capital of this plan is transmitted to his heirs”observes the Council of Compulsory Deductions. A sort of tax jackpot since the payments deducted from taxable income “on entry” are not taxed “on exit” either.
“The PER should not be a tool for tax optimization in matters of inheritance”
Add to this reductions at the time of inheritance – 152,500 euros per beneficiary if the subscriber dies before age 70, 30,500 euros for all beneficiaries if he or she dies afterwards – and you obtain a solution that is particularly popular with savers. Especially since if the designated beneficiary of the PER is the spouse, the latter simply escapes inheritance tax. He therefore pays neither income tax nor inheritance tax. “Constituted by flows not subject to income tax in the hands of the deceased at the time of its creation, the PER offers a “double advantage” to the persons concerned”deplores the CPO.
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Reason why the institution requests “evolve the main characteristics of the PER to refocus it on its primary purpose which is to promote retirement savings”. The Council for Compulsory Deductions therefore requests the establishment of a “compulsory gradual exit, or even compulsory liquidation of the PER from a certain age”without further details. A path which is certainly not perfect, recognize the authors of the report, this does not prevent the maintaining the tax advantage for subscribers who die before the set age limit and their heirs. But who would “the merit of consistency with the primary objective of the PER which is to encourage the development of retirement savings, and not to constitute a tool for tax optimization in matters of inheritance”they conclude.
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