Life insurance: transmit well to all ages

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Do you want to optimize the transmission of your assets fiscally? Life insurance is an excellent option, whatever your age. The explanations of Gilles Bellir, Director General of Placement-direct.fr.

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With 18 million subscribers and more than 2,000 billion euros in outstandinglife insurance is the favorite financial investment of the French. Among its many advantages, we can obviously cite its tax framework on the death, most favorable to transmit to your loved ones. In this area, there is a 70 -year -old pivot age that will affect the tax rule applied to beneficiaries.

When the payments were carried out before 70 years (art. 990 I of the CGI) each beneficiary, whatever their relationship with the subscriber, benefits from a reduction of 152,500 euros on the value of the contract. A flat-rate tax of 20 % is then retained up to 852,500 euros, then from 31.25 % beyond.

A couple who have each subscribed to their own life insurance contract which designates their three beneficiaries by equal shares could thus transmit them up to 915,000 euros in tax franchise. A sacred advantage!

For payments carried out after 70 years, apart from the contracts open before November 20, 1991 (they follow article 990 I of the CGI), everything changes, since fiscally, it is the scale of inheritance rights which will apply (art. 757 B of the CGI). At first glance, this evolution seems unsuitable since the tax rates retained on a succession evolve up to 60% for a third party.

Reduced taxation, including after 70 years

However, the payments made after 70 years can be particularly advantageous. And this for two reasons: on the one hand a new allowance of 30,500 euroscommon to all taxed beneficiaries, apply. On the other hand, all the gains generated by the payments after 70 years are exempt.

Take an example to better appreciate its real impact. You plan to invest a sum of 80,000 euros at the age of 70. On your death, your life insurance contract is valued at 140,000 euros.

Excluding life insurance, if you had, for example, favored a bank savings product or an investment in rental real estate … Capital would have been entirely subject to the scale of inheritance tax. With a life insurance contract, however fed after 70 years, the taxable share will only be 49,500 euros (€ 80,000 – € 30,500), almost three times less. The tax economy generated by life insurance will then be considerable.

Finally, feeding a life insurance contract to optimize the taxation of the transmission of your assets is always advantageous, whatever your age. For better follow -up, it is however recommended to isolate on two different contracts the payments made before and after 70 years.