The tax treatment of life insurance is very favorable, it can limit or even negate the imposition of Realised gains . The higher your life insurance contract is old, less taxation of capital gains is high:
- For contracts of less than 4 years : the tax is equal to 35% capital gains
- For Contracts 4 years to 8 years : Tax is equal to 15% capital gains
- For contracts of more than 8 years : the tax is equal to 7.5% of capital gains. But capital gains are reduced by an allowance of 4600 € for a single person and € 9,200 for a married couple.
The dates payments are made are irrelevant.
What counts is the opening date of the contract.
That, for tax strictly so called.
But there is another type of compulsory levies on capital gains.
These social security contributions.
Whatever the age of the contract, they are of 11% of the gain .
That's taxation policies taken today.
For existing contracts, there were different regimes depending on the underwriting years and years of payment:
For payments made before September 26, 1997, the income is exempt from taxation.
There are special rules for payments made between September 26, 1997 and December 31, 1997 when the contract was opened before September 26, 1997. See section 125-0 A tax code .
