MPs have just adopted an amendment to the 2025 Budget which increases inheritance tax on life insurance. The voted measure plans to align this taxation, when the subscriber has made payments before age 70, with that of direct line inheritances.
© NICOLAS SANDANASSAMY
– The inheritance benefits of life insurance have never been as attacked as in recent months.
A tax revolution for life insurance? The members of the Finance Committee of the National Assembly adopted, this Thursday, October 17, an amendment from the deputy for Pyrénées-Atlantiques, Jean-Paul Mattei (Les Démocrates), which provides “to align the taxation of the transfer of life insurance contracts after deduction with the model of direct inheritance tax”. The measure voted by elected officials attacks more precisely the inheritance advantages of employment contracts.life insurance on which the holders made payments before their 70th birthday. A threshold that currently changes the tax rules at the time of death.
Indeed, when payments take place before this age limit, a deduction of 152,500 euros benefits each of the designated beneficiaries of the contract. Below this amount, they are therefore not taxed. Then, a 20% levy applies to the first 700,000 euros taxable, a charge which increases to 31.25% beyond that. On the other hand, when payments take place after age 70, a reduction limited to 30,500 euros is shared between all beneficiaries, before giving way to inheritance tax, the scale of which varies depending on the degree of relationship between the deceased and the deceased. beneficiary.
Up to 45% inheritance tax compared to a maximum of 31.25% today
And it is precisely to inheritance tax that Jean-Paul Mattei wants to submit life insurance contracts on which payments were made before the deceased turned 70. The elected official proposes to apply “the same rate as for direct line inheritances”that is to say when the heir is a child, a grandchild or even a parent. With a much more progressive scale since rising up to 45% for the taxable fraction above 1,805,677 euros. Result of this alignment with the direct line inheritance tax scale: after the reduction of 152,500 euros, any balance would be taxed at 20% up to 552,324 euros, then at 30% up to 902,838 euros , at 40% up to 1,805,677 euros and finally at 45% beyond this amount.
This reduction in the tax advantages of life insurance is in line with a recent report of the Court of Auditorswhich recommended reducing them for this envelope. However, the amendment of Jean-Paul Mattei, adopted against the opinion of the general rapporteur of the Budget, Charles de Courson (Liot), but with that of the LFI president of the Finance committee Eric Coquerel, is far from being engraved in marble. It will still have to be examined (and voted on) in a public session in the hemicycle from October 21.
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