For expats, managed by independent experts





 French “ASSURANCE VIE”          

French Assurance Vies are uncontestably the solution for expats seeking to invest a lump sum or make regular payments. The reason they are so successful is due to the multiple advantages they offer both residents and non-residents. The tax benefits are numerous and despite recent changes voted in this year “Loi de Finances”, most advantages remain unchanged.


Tax on withdrawals:

  • no tax applied unless withdrawals are made
  • only the growth element is subject to tax
  • the older the policy the less tax one will pay
  • the subscriber always has the choice between paying:
    • a “withhold tax” of 12,8% called “Flat Tax” (previously PFL)
      • if your policy is more than 8 years old, and you withdraw more than 4600 €’s interest during the year as a single person, (or 9200 €’s if you are married), the tax is reduced to 7,5%, up to 150 000 €’s and goes back up to 12,8% after that.
    • or adding the interest withdrawn to an “income tax declaration” (the different scales being, 0%, 14%, 30 %, 41% and 45%).


Inheritance tax:

A 152 500 € allowance “per beneficiary” is applied on the death of the person insured. As an example, if there are four beneficiaries, 610 000 €’s (4x152 500 €) of that person’s estate will be totally exempt of French inheritance tax as long as it has been invested in “assurance vie” before the policy holder reaches age 70. Beyond that age, any money invested in an assurance vie has a much smaller allowance of 30 500 €s’ applies and unlike the first allowance is “divided” by the number of beneficiaries, for example if there are four beneficiaries, their respective allowance will only represent 7 625 €’s.

Both these allowances (Art 990 I and 757 b of the CGI) come in “addition” to the common right allowance of 100 000 €’s applicable per child.

Please note that that these allowances apply per “privileged ascendant” (parent) and per “descendant” (children) of the same bloodline.

There is no inheritance tax between husband and wife (or PACSed couples).


Art. 132-12 of the French insurance code also stipulates that Assurance vie is excluded from the person insured’s succession, in other words any amount invested in assurance vie will also override France’s forced heirship system, and the named beneficiaries, whoever they are, and whatever their blood relationship with the deceased is, will inherit according to the tax system previously explained. It could well be that the neighbor is the beneficiary of 152 500 €’s of fathers’ assurance vie, which he will receive under the form of a check sent by the insurance company involved, totally tax free. And no one will have the right to contest, not even the children. Unless, the 152 500 €’s represented fathers’ entire estate, in that case, the children could claim that the premium was manifestly exaggerated. 


Social tax:

A 17,2% social tax applies on all withdrawals, on the growth element (interest).

Non-residents are exempt from paying “social tax” on their assurance vie policies.


Please note that these tax rules are standard to all assurance vies owned by French fiscal residents and apply to Luxembourg or Offshore policies.


From a legal point of view, Assurance vie, is:

  • a “stipulation to others”, hence you must always name a beneficiary
  • “uncertain” as they are totally related to “how long the insured will live”
  • a “forfeit or lump sum person insurance” (Article 131-1 of the ‘code des assurance’), hence it is not subject to any excess or limits, the contractor can open as many policies as he likes



Assurance vie is also a powerful investment solution:

Appreciated for their flexibility, they remain France’s most sought-after investment. One of the reasons for this success is the “Fonds Euros” a capital guaranteed bond-based fund, intended for French policies and managed independently by each insurance company who guarantee the invested capital to their investors.

For a few years now, these funds have not been performing as well as they used to, except for the rare exceptions.


Assurance vie is becoming more and more real estate orientated:

With the “fonds euros” failing to deliver, insurers and asset managers have been looking for alternative “low risk” investment solutions, legally compliant with Assurance vie wrappers. Real estate being the most sought-after investment category over the last 50 years or more, it is naturally towards this market investors have turned. As a result, a multitude of real estate-based funds, have seen the light over the past five years.

Largely spread and first of their kind are the OPCI’s. Originally launched by the leading insurance companies (like Axa with Selectiv’Immo, or Amundi with OPCImmo.). These however remain financial solutions, i.e. real estate oriented OPCVM’s. They deliver interest rates as high as 4 % gross, which comes from the dividends generated by income from rent, mainly professional buildings or offices on long term leases. The more refined assurance vies, allow the investor to allocate physical property shares, such as SCPI’s (real estate investment trusts), or SCI’s (real estate civilian companies, managed by several owners, who each own shares inside the SCI), both managed by real estate professionals as opposed to insurers. Their interest rates remain steady and it is not rare to find a 5 % gross return.  Interest is mainly generated by rental income from property purchased in sought after areas, positioned in ‘up and coming’ areas of Europe’s capital cities, paid by carefully chosen tenants (professionals, banks, financial institutions, never individuals…) tied by very long-term leases they represent a guarantee of return on the long term and security of capital, to the investor.


A policy largely compliant with non-residents, whether a DTA is signed or not:

For non-residents, or expats who decide to move back to their home country, nothing stops them keeping their Assurance vie policies open.

In these cases, the tax system will of course change and generally only “withhold tax”, the exceptions being where a DTA is signed between France and the residential country of the policy holder.

As an example, the DTA signed on the 19th of June 2018 between France and Great Britain stipulates that no withhold tax will be claimed or should be paid in France by British nonresident assurance vie policyholders, and that only their homeland tax system should apply.

This is also true for the “Contrat de capitalization”.


  • Expected return: between 2 % and 6 %
  • Average investment risk: From “no risk” to “dynamic”
  • Recommended holding period: 6 years minimum
  • Minimum amount of investment: 50 000 € (or 150 € / month)
  • Availability: Practically immediate (10 days min.)
  • Tax benefits: Income tax, Inheritance tax


Luxembourg “ASSURANCE VIE”


Luxembourg Assurance vies is very popular among the expat and non-resident community, as they offer assets that correspond to their projects as an expat.


From a financial point of view:

  • The subscriber can invest in different currencies, such as GBP, USD or €’s
  • Luxembourg regulations allow the subscriber to entirely customize his policy using so called “dedicated funds” in which you can choose to invest almost any variety of asset with no real limitation (even the riskiest, or the most atypical)
  • the policy can be opened, or additional payments can be made, by contributing securities


From a safety point view:

  • your funds are held in a custodian bank distinct from the insurer’s equity
  • in the case of default by the insurer, your assurance vie will override all other creditors


From a tax point of view:

  • Luxembourg tax authorities do not apply “withhold tax”, which excludes the risk of double taxation, and simplifies the application of the DTA’s.
  • The tax rules applied in the case of withdrawal, or succession, are those of the subscriber’s current place of residence.
  • Luxembourg policies can be opened by non-residents.


  • Expected return: depending on the allocation, between 0 % and 10 %
  • Average investment risk: From “no risk” to “extremely dynamic”
  • Recommended holding period: 6 years minimum
  • Minimum amount of investment: 250 000 €
  • Availability: Practically immediate (15 days min.)
  • Tax benefits: Income tax, Inheritance tax



Although they are compliant with both expat and nonresident tax and legal statuses, they are sadly not often used by estate planners dealing with the international investor.

They are however a useful tool, when it comes to wealth management, especially successions. Characterized by their similarity with assurance vie policies, mainly because they are taxed identically.

“Contrat de Capitalization” do distinguish themselves from assurance vie, from a legal point of view, as there are not a “stipulation for another”, and do not support beneficiary clauses. These policies obey to the “French common right” succession laws.

Here is a brief resume of the assets offered to clients, looking to optimize their transmission, or their estate:

  • The contract does not end when the policyholder dies the inheritor can choose to keep the policy running after the death of its subscriber,
  • the subscriber can donate the policy, which will keep its tax advantages (example: if the policy is more than 8 years old, it keeps its tax benefits)
  • these contracts can receive funds from a dismemberment (in France, property is very often dismembered, where one person legally owns the “Nue Propriété” (the right to receive the full property, without paying IHT, upon the death of the usufructuary) and the other person legally owns the “Usufruct” (the right to use and rent the property). The value in euros, owned by each party is determined according to Article 669 of the CGI’s scale system. If the property is sold, both parties, may want to keep the dismemberment status, especially as very often the Usufruct, has donated the right to the Nue Propriété, and paid donation tax. The only policy which can accept dismembered lump sums is the “contract de capitalization”.

It’s use however remains very specific, and it is really your estate planner who should suggest you use this policy, rather than or in addition to assurance vie, when planning your succession, or the transmission of your estate.

  • Expected return: between 2% and 10 %
  • Average investment risk: From “no risk” to “extremely dynamic”
  • Recommended holding period: 6 years minimum
  • Minimum amount of investment: 250 000 €
  • Availability: Practically immediate (10 days min.)
  • Tax benefits: Income tax, Inheritance tax


« Plan d’Épargne Retraite Populaire – PERP »

The PERP is France’s private pension planning investment solution, mainly for employees. It was once a Qualified Overseas Pension Scheme, as they are almost identical to UK’s pension plan’s. The policyholder can withdraw 20 % as a lump sum on retirement, and will then receive lifelong annuities, reversible to the remaining spouse. During the payment phase, interesting income tax benefits apply.

  • Expected return: between 2,5 % and 6 %
  • Average investment risk: “No risk whatsoever” to “moderate” @@
  • Recommended holding period: Lifelong
  • Minimum amount of investment: no minimum
  • Availability: 20% PCLS on retirement only & lifelong annuities only
  • Tax benefits: Income tax


“MADELIN Law Pension Plan’s (for self-employed)”

The “Madelin Law pension plan” is the ideal solution for independent professions. It combines two interesting tax benefits. On one side payments into the plan are a company charge and reduce its taxable profits, and on the other side it is an excellent way for the manager to take funds out of the company for future personal use (i.e. his pension), without paying tax.  These policies are very popular amongst the “expat community” who run their own business. (This law also applies to family protection, and safety insurance policies for this same category of professionals)

  • Expected return: between 2,5 % and 6 %
  • Average investment risk: “No risk whatsoever” to “moderate”
  • Recommended holding period: Lifelong
  • Minimum amount of investment: no minimum
  • Availability: Lifelong annuities only
  • Tax benefits: Income tax


“Plan d’Epargne en Action – EQUITY SAVING PLAN”

An excellent way to invest on the European stock markets. Growth is not taxed after 5 years. Only open to equities and shares.

  • Expected return: between 1 % and 20 %
  • Average investment risk: moderate to significant
  • Recommended holding period: 5 years
  • Minimum amount of investment: no minimum
  • Tax benefits: Income tax


“Bank Investments – Livret A, LDD, PEL, CEL…” 

Non-structural savings accounts, an alternative to as a complement to a current account.


  • Expected return: 0,75%
  • Average investment risk: No risk
  • Recommended holding period: 1 year
  • Minimum amount of investment: no minimum
  • Tax benefits: none



An ideal solution for the expat investor, who wish to transfer their personal or occupational UK pension plans to a more flexible, multicurrency, tax efficient offshore investment bond. In view of the specificity of these offshore pensions solutions, we recommend you talk to one of our qualified tax and investment consultants, who will help you identify your real needs for these solutions.

  • Expected return: between 2% and 10 %
  • Average investment risk: From “no risk” to “extremy dynamic”
  • Recommended holding period: Life long
  • Minimum amount of investment: 30% PCLS as from age 55, and lifelong annuities or possible Flexi Draw down.
  • Tax benefits: depend on the DTA signed between the two countries involved, and your country of main residence