Assurance vie is an investment product in France that has exceptional tax advantages. It is the go to product for most people in France wanting to put money aside in a tax optimised way.

In brief:

• An investment vehicle for stocks, bonds and money market funds
• During the first 4 years the “gain” is taxed at a maximum rate of 35%.
• Between 4 and 8 years, the “gain” is taxed at a maximum rate of 15%
• After 8 years, withdrawals are tax-free (up to a capital gain of no more than 4600€ annually for a single person or 9200€ annually per couple)
• Any additional capital gain is taxed at a maximum rate of 7.5%.
• Capital gains are still subject to social taxes (CSG, CRDS) at 15.5%
• Do note, if you do not use an Assurance Vie investment vehicle, you will pay your top band rate income tax - plus 15.5% social tax - on all gains, dividends & interest

Upon the policy owner’s death, the proceeds are distributed to the beneficiaries (after social taxes have been paid):

• Distributions to the spouse or PACS partner are exempt from inheritance tax
• All other beneficiaries have a specific assurance vie tax-free allowance of 152,500€ each

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France Home Finance is a fully licensed and insured insurance broker offering French life insurance, French home insurance and tax sheltered savings plans (assurance vie, PERP.)