Tax rise plans for assurance vie

Investment accounts above €1m to be subject to heavier inheritance tax, plus retrospective charges on older accounts

13 November 2013
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PLANS to levy heavier inheritance tax and more social charges on assurance vie investment accounts have been put before cabinet.

They are to be included in budget proposals currently being discussed in parliament and will be debated before the end of the year.

The rise in inheritance tax on the accounts, from 25% to 31.25% will apply only to contracts worth more than €1m when they are received by heirs. (After the initial tax-free sum of €152,000).

However, the founder of the website monfinancier.com Marc Fiorentino, told BFMBusiness, this represented a foot in the door.

Assurance vie contracts have escaped, on the face of it, a harder tax regime. In some months the limit of one million euros will be dropped to €500,000, then €150,000,” he said.

The plans also include measures to retrospectively levy social charges on the types of assurance vie known as unités de compte.

These accounts, which hold stocks and shares rather than euros, have previously been subject to lower charges.

The gains made by these accounts since 1997 will be taxed retrospectively at 15.5% - a measure that affects seven million people.

Under the proposals, a new form of assurance vie, called Eurocroissance will also be created. It will be a mixture of funds held in euros which will provide a stable base, and shares, which will carry a higher risk.

People with assurance vie accounts in euros will be able to transfer them to the new Eurocroissance accounts without resetting the clock on the age of their accounts and thus losing benefits. They will, however, have to pay a 0.32% transfer tax.

Another new type of account will also be created for those with large savings who are preparing their succession. They will be more heavily orientated to shares and investments in small businesses and social housing.

Investors in these new accounts will be able to avoid the heavier rate of taxation; when they are passed on they will be taxed at 25%.

Jérôme SALORT - Fotolia.com

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