Life insurance: what do you need to report to taxes?

Life insurance is one of the favorite investments of the French. On the other hand, its taxation is complex. Petit recapitulatif pentru savoir quand declara ses revenus d’assurance-vie.

The deadline to declare your income is approaching. And you may be wondering how to declare your life insurance to taxes. Whether you choose to place your capital on a secured and secure medium such as the euro fund, or rather on a riskier medium such as units of account, taxation remains difficult to understand. In general, you do not have to pay interest taxes in 2021. Except in the case of redemption (in whole or in part) of your contract, you have nothing to declare.

In fact, when you do not withdraw, you are exempt from notifying taxes of gains from your euro funds or units of account.

What happens if you retire in 2021?

On the other hand, and last year, you made a life insurance withdrawal, your gains can be taxable. In fact, the public treasury taxes the profits generated by life insurance on exit, at time of redemption.

To calculate the amount of tax due, the tax authorities will distinguish between deposits and capital gains. If you have made a partial redemption, then you are taxed on the share of capital gains included in the amount withdrawn, on a pro rata basis. For a total redemption, the tax will bear only the surplus value, ie the difference between the total payments effect from the opening of the contract, and its final value at the total redemption. Of course, if there is no capital gain, you will not have any taxes to pay.

Please note that in any case, at the time of withdrawal, you will benefit from a discount of 4,600 euros, 9,200 euros for a couple, if your life insurance contract is more than 8 years old at the time of redemption. This discount is valid every year. It concerns the share of earnings in your withdrawal. Be aware that it is the public treasury that applies the rebate itself based on the information provided to you by your insurer. The latter also had to send you a single tax form (IFU) detailing the amounts indicated to the tax authorities.

Also note that interests may be exempt from tax in the event of redemption, and whatever the length of the contract, in several particular situations: dismissal, recognition of a 2nd or 3rd category disability, or early retirement. These exceptions also apply to the signing of the contract or the PACS partner.

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