Assurance Vie Taxation | Clear Tax Information For Expats
This article is intended for British expats in France considering an Assurance Vie investment account. We will clearly and concisely detail the tax treatment of an Assurance Vie under French law.
As a UK expat living in France, managing your wealth across two tax systems requires careful planning. One of the most powerful and flexible tools available to you is the assurance vie, a French investment wrapper offering tax advantages, estate planning benefits, and long-term growth potential.
Here’s what you need to know about how assurance vie taxation, how withdrawals are taxed, and why this vehicle could be an essential part of your financial strategy in France.
How Are Withdrawals From Assurance Vie Taxed?
Tax is only applied when you withdraw funds from an assurance vie, either partially or in full. Until then, your investment can grow tax-deferred, a key advantage for long-term planning.
Full Withdrawal
Taxable gain = Final policy value – Total premiums paid
Partial Withdrawal
Taxable gain = Withdrawal – (Total premiums × Withdrawal ÷ Total policy value)
Your provider calculates this for you automatically.
Assurance Vie Tax Rates Based On Policy Duration
Policies Held Less Than 8 Years
Income Tax: 12.8%
Social Charges: 17.2%
Total Tax: 30%
Policies Held Over 8 Years
Reduced Income Tax Rate: 7.5% (on gains from premium contributions up to €150,000 per person)
Social Charges: 17.2%
Total Effective Rate: 24.7%
Annual Allowance: €4,600 (individuals) / €9,200 (couples)
For UK expats with significant capital, this structure allows strategic withdrawals over time, reducing your overall tax burden.
Capital Gains Tax Benefits: Tax-Free Growth Through Fund Switches
Unlike traditional investment accounts in the UK, switching funds within an assurance vie doesn’t trigger capital gains tax. This gives you the flexibility to adapt your investment strategy without facing immediate tax implications, a major benefit for active portfolio management.
Wealth Tax (IFI): What You Need To Know
France’s real estate wealth tax (Impôt sur la Fortune Immobilière or IFI) applies to net real estate assets over €1.3 million. If you hold property-based investments inside your assurance vie, only the real estate portion is counted toward your IFI liability. Other holdings, such as shares, bonds, or money market funds, are excluded.
This allows you to significantly reduce your exposure to wealth tax through smart portfolio allocation.
Estate Planning: Inheritance Tax Efficiency
Assurance vie stands out as a highly effective estate planning tool for British nationals living in France.
Premiums Paid Before Age 70:
€152,500 tax-free allowance per beneficiary
20% tax on the next €700,000
31.25% tax on amounts beyond that
Premiums Paid After Age 70:
€30,500 allowance across all beneficiaries
Standard inheritance tax rates apply above this threshold
Spouses and PACS partners inherit tax-free, making this structure ideal for protecting your partner and planning multi-generational wealth transfers.
Expert Financial Planning For UK Expats In France
Taxation in France can be complex, especially when combined with UK financial obligations. At The Wealth Genesis, we specialise in transparent, fee-based, bespoke advice for UK expats living in France.
We help British expats:
Structure and optimise assurance vie policies
Minimise French and UK tax exposure
Align investment strategies across jurisdictions
Plan long-term wealth transfer and retirement income
