AXIS

Estate Planning in France

The benefits of Assurance Vie policies are not restricted to income tax or capital gains tax; these vehicles can also be used as an estate planning tool in order to protect assets when living in France.

French inheritance tax and succession law

French succession laws apply to the world wide assets held by anyone domiciled in France. The tax liability falls on the beneficiary and is applied to all the bequests and inherited rights of the estate of the deceased. After an initial abatement, beneficiaries are taxed on a scale ranging from 5% to 60% of the value of the assets inherited.

Succession law specifically protects children from being disenfranchised from their inheritance. Since the surviving spouse is not regarded as a "protected heir", estate planning can become an extremely challenging exercise for many expatriate residents.

Fortunately, a solution is at hand for the preservation and development of capital through the use of French life assurance vehicles. The Assurance Vie offers a shelter from the rules of "forced heirship", making it a useful tool for spouses to transfer assets between one another and provide protection to the surviving partner in the event of death.

The proceeds paid out from Assurance Vie plans are largely beyond the reaches of French succession law. To this end, named beneficiaries of policies are granted a tax exemption of up to €152,500, with a 20% levy on any distributions above this amount. As the tax allowance applies to each beneficiary, it is thus possible to make provision for several family members.

If you would like further information on Assurance Vie products available to French residents for wealth management purposes, please go to Financial health-check

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support@axis-finance.com