Hervé, reader of Capitaladdresses the following question: “Hello, our mother paid around 60,000 euros after her 70th birthday on open life insurance before her 70th birthday. She has made partial redemptions from this contract. How are these buyouts taken into account in the event of a succession? On the other hand, it has another life insurance Open before November 20, 1991, would it be relevant to make a payment? ”
Hello Hervé, and thank you for your question, which allows you to return to a point that can be difficult to grasp: the calculation of the taxable plate of the payments after 70 years in the event of a succession, when there have been anticipated withdrawals.
How are redemptions on a contract with payments after 70 years?
When payments were made after 70 years, they enter the field of article 757 B of the General Tax Code. The overall reduction in 30,500 euros applies to the whole of the capital transmitted, regardless of the number of beneficiaries. But if the subscriber of the contract (the deceased) made redemptions during his lifetime, they decrease the amount eligible for the allowance.
In other words, on the death, only the fraction of the payments still present on the contract will be taken into account for the succession. The beneficiaries are therefore not imposed on the sums already withdrawn, but only on the part which remains and which is bequeathed to them. It is the insurance company that calculates this balance to reach the amount of capital actually transmitted.
And for contracts open before November 20, 1991?
Your mother also has open life insurance before November 20, 1991. These former contracts benefit from a very favorable regime: for bonuses paid before October 13, 1998, the capital transmitted to beneficiaries is exempt from rights, without limit. For the premiums paid after this date, classical taxation applies. On the other hand, making a new payment on such a contract today does not allow you to benefit retroactively from this advantageous scheme. The payments would be subject to the current rules, depending on the age of the insured at the time of the operation (payment before or after 70 years).
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