What makes life insurance one of the favorite investments of the French is, among other things, its particularly attractive taxation. It operates on various materials that we will present to you.
Taxation At Interest Level.
Interest from savings in a life insurance policy is first subject to social security contributions and this as soon as they are paid into your account. The rate is currently 15.5%.
Then there are two possibilities: either the rest of your interest is subject to income tax, or to the flat-rate deduction .
If you choose to be taxed as income tax, be aware that after 8 years, you will benefit from a reduction of € 4,200 for a single person or € 9,200 for a couple in the form of credit d ‘tax.
If you choose the standard deduction, the rate will depend on the length of the contract from 35% prior to 4 years to 7.5% from the 8 th year.
Taxation In The Event Of Early Exit.
When taking out your life insurance policy , you will have decided to set a minimum period during which you will have to leave the savings in place. However, it is still possible to access part of your money before the end of this period.
It is then a partial redemption . The calculation of the earnings which will then be taxable for calculation as follows: Amount of partial withdrawal – [your payments on the contract x (amount of partial withdrawal / amount of total amount)].
Taxation In The Event Of Death.
The main objective of life insurance remains to be able to easily transmit capital to the beneficiary of their choice while taking advantage of good tax conditions.
When the subscriber dies, the capitalized sum is exempt from inheritance tax, which represents a huge advantage. In addition, your beneficiaries will also be exempt from paying social charges. Finally, the taxation on the amounts transmitted will depend on your age at the time of death:
- Under 70 : beneficiaries will be tax exempt up to $ 152,500 each. Beyond, flat rate tax of 20%.
- Over 70 years : tax exemption up to $ 30,500. Beyond, classic inheritance law.