Succession: “Am I exempt from taxes as beneficiary of open life insurance before 1991?”

A capital reader wonders about the specific tax advantages of open life insurance contracts before 1991, in particular when it comes to transmitting capital.

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Jean-Marcel, reader of Capitalsend us the following request: “Hello, is it correct that beneficiaries of life insurance contracts open before 1991 are exempt from all taxation up to 152,000 euros, and this even for payments made after 70 years?»»

Hello Jean-Marcel, and thank you for your question. It allows us to approach on a complex subject, but which can concern a large number of readers: the taxation of old life insurance contracts, in particular those subscribed before November 20, 1991. These contracts indeed benefit from more favorable tax rules. But these advantages are subject to several conditions.

The date of payments has more than that of opening the contract

First of all, it is true that life insurance contracts subscribed before the November 20, 1991 benefit from a very advantageous tax regime for beneficiaries, provided that The payments were carried out before October 13, 1998. If this is the case, the capital transmitted following the death are entirely exempt from inheritance tax, regardless of the amount. These payments therefore escape any taxation.

Regarding payments made after October 13, 1998they will be submitted to taxation at the time of transmission, but each beneficiary still benefits from a reduction. The latter is 152,500 euros on the capital transmitted (article 990 I of the general tax code). In other words, your beneficiaries will not have to pay any tax until this amount. Beyond this reduction, the sums are taxed at 20% up to 700,000 euros, then to 31.25% beyond.

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You will understand that Jean-Marcel, it is therefore more the date of payments rather than that of the opening of the contract that will have to be looked at to find out if you or your beneficiaries will be completely exempt. On the other hand, the age you had at the time of these payments will have no impact, the reduction of 152,500 euros applying even after your 70 years, confirms Thomas Prud’homoz, associate notary of the KL Consulting study: “For contracts subscribed before November 20, 1991, death capital is exempt from tax if the premiums were paid before October 13, 1998. For the payments made after this date, including those made after 70 years, a specific reduction of 152,500 euros per beneficiary applies.”

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