The life insurance has many advantages. It allows you to grow your savings by adapting to the degree of risk accepted, but it is also an essential transmission tool that largely escapes the tax authorities . Provided you are not in a hurry, it is possible to recover your accumulated savings in return for reduced taxation.
Certain grounds for exemption First of all, remember that the Public Treasury will only claim its due from you in the event that you obtained income from your life insurance during the year d ‘taxation. In other words, you can spend years saving on your policy without paying any tax on it. It is only when you withdraw your earnings that the tax authorities will take their share. And it is here the gains that are taxable, in other words the interest generated, and not the whole of the capital recovered.
But certain exceptional situations make it possible to avoid any taxation regardless of when you receive the funds. This is particularly the case for an early withdrawal following a dismissal, recognition of disability, judicial liquidation of your company or your early retirement. These justifications apply to the contract holder as well as to their spouse or PACS partner .
Patience rewarded Apart from these special cases, optimizing your life insurance is above all a matter of patience. This contract is in fact designed to finance medium- or even long-term projects. Therefore, its level of taxation decreases over time. The oldest media, subscribed before 1983 and no longer supplied since 2018 , are exempt from taxes . As for contracts taken out before 25 September 2018 , they benefit from a total or partial exemption, depending on the date of the payments.
Conversely, a portfolio contracted after this date and no longer funded since 26 September 2017 is taxed up to of 35% if the withdrawal of funds takes place before four years of detention, 15% between four and eight years and 7.5% beyond. Social security contributions are also added (15, 2%).
Finally, if you have funded your life insurance after this key date, you are in principle subject to the single flat-rate deduction (PFU) set up in 2018. When collecting your earnings, the insurer takes 11, 8% for less than eight years and 7.5% beyond. In the latter case, there is only if your capital exceeds 150. . euros that the fraction greater than this amount will still be subject to the rate of 12, 8%. Be careful, here again, social security contributions will have to be added anyway (15, 2%). In addition, an annual allowance of 4. 600 euros (or 9. 150 euros for a married or civil union couple) applies as a bonus for any withdrawal of funds made after eight years of contract.
The most advantageous calculation 2019
While the single flat-rate deduction now applies automatically to all income from capital, the legislator leaves savers the possibility of opting for taxation at the progressive scale of income tax ( by checking the necessary box in the annual declaration) which can sometimes be more advantageous. But be careful, this option is global and will therefore concern all of your interests, dividends and other capital gains collected in the same year.
To decide, you have to compare its tax rate. Thanks to the income tax scale, even the most modest households can receive the earnings of their life insurance while remaining tax-free. If you fall under the second tax bracket at 000%, it is also more advantageous to opt for the progressive scale, unless you take advantage of the PFU at 7.5% (withdrawal of funds after 8 years). The most taxed households, on the other hand, have every interest in keeping the single lump-sum deduction.
Your life insurer or financial advisor can help you determine the date and terms of redemption. most interesting contracts in terms of taxation.