The Civil Solidarity Pact celebrates its 25th anniversary this year. Halfway between cohabitation and marriage, this form of union offers certain advantages to partners. Particularly in matters of taxation.
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It is attracting more and more interest from couples in France. The Civil Solidarity Pact (Pacs) celebrates its 25th anniversary this year. Although we do not yet have the number of PACS signed last year, nearly 210,000 unions were concluded in this form in 2022, bringing the total number of PACS registered since 1999 to more than 3 million. Often considered as an alternative to marriage, the PACS does not however present the same advantages for the partners. Taxes, retirement, or inheritance, this is what you can benefit from by entering into a civil partnership.
In terms of inheritance, the PACS has an advantage if your partner has designated you as heir in his will. Indeed, if this is the case, you will not have to pay inheritance tax. On the other hand, if nothing is planned in advance, the survivor will not be considered an heir of the deceased. Another possibility is to opt for life insurance. Thanks to the beneficiary clause, the two PACS partners can designate each other as beneficiaries. This protects the survivor, without necessarily resorting to a will, in the event of the death of the partner.
When it comes to pensions too, civil partnership couples do not have an advantage. In the event of the death of the spouse, the survivor cannot receive survivor’s pension which is reserved for married couples. However, the question of opening the survivor’s pension to civil partnership couples regularly comes back to the table, at the initiative of parliamentarians through legislative proposals or questions to the government. If for the moment, this has not been done, it is an area of reflection for the Retirement Orientation Council (Cor).
Income tax benefits only
However, the PACS changes the situation in terms of taxation. Because signing the PACS agreement triggers joint taxation for the couple. The partners, however, have the choice of declaring their income separately the year following the conclusion of the PACS. Afterwards, joint taxation becomes obligatory. The advantage of the PACS in terms of tax is that it gives the right to two shares of the family quotient.
Thus, joint taxation can prove particularly advantageous in the event of income disparity between the partners. Let’s take the example of a couple whose total income amounts to 67,000 euros per year. The first partner declares 40,000 euros, the second 27,000 euros. If they each declare their income separately, then they will pay 4,086 and 1,206 euros in tax respectively, for a total of 5,292 euros. If they were in a civil partnership, on the other hand, then they would only pay 4,662 euros in taxes in total, a saving of 630 euros. The General Directorate of Public Finances (DGFIP) provides a online simulator to estimate your taxes without and with the PACS.
And if the couple subsequently has children, they will benefit from the same tax advantages as married couples: an additional half-share for the first two children, then a tax share per child from the third.
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