Are you looking to prepare for your loved ones' future ?
The Gift Pack: make a gift within the assurance vie framework.

Hand down part of your assets in favourable conditions, today.

The Gift Pack in a nutshell : gift + assurance vie, the winning combination

Prepare your children or grand children's future in your lifetime

  • Set them up a savings account on the assurance vie policy in their name through a gift.
  • Decide today when they should receive the capital.

Make the most of the favourable fiscal framework for your gifts and assurance vie

  • Gift: pass on up to €100,000 and €31,865 to your children and grandchildren respectively, free of transfer taxes every 15 years
  • Assurance Vie: your children and grandchildren shall benefit from a favourable tax framework when they undertake a buyback on the life insurance policy, after a withholding period of 8 years.

Gift Pack: prepare for your loved ones' future under favourable conditions

Simple and controlled transfer

  • Make payments on an Assurance Vie policy subscribed in the name of your child or grandchild (beneficiary) through one or more successive manual gifts.
  • Draw up an additional agreement on gifts* and choose the date your children or grandchildren benefit from the transferred capital: on reaching 18 years of age, on buying their principal residence, etc...
  • Declare your gift to the tax authorities without a notary.
  • Choose the management conditions for the funds invested yourself: management style, buyback terms etc...

A tax-favourable solution for you and your loved ones

  • You benefit from specific tax breaks on gifts and can renew your gift every 15 years under the same favourable tax conditions.
  • Your children or grandchildren will retain the tax benefits of the life insurance policy. They benefit from favourable taxation** in the event of buyback after an 8 year withholding period.
  • Decrease the basis for calculating the Solidarity Tax on Wealth (ISF) if you are taxed on a particular amount.

What tax rebates are there with regards to transfer duties on gifts ?

  • You can give up to €100,000 and €31,865 to each of your children and grandchildren respectively every 15 years without having to pay transfer duties on gifts.**
  • If applicable, you can also make an additional gift within the 15 year period if your accumulated gifts have not reached these limits
  • Why draw up an additional agreement on gifts ?

    An agreement is a means to specify, without fees or intervention from a notary, how to use your gift. The agreement stipulates that this gift was made on the condition that the amounts gifted shall be paid on a life insurance policy.

  • Be sure to respect the reserved portion of an estate.

    If you have compulsory heirs (descendants, and in the absence of descendants, the spouse), they cannot be deprived of a portion of your estate, called the "legal reserve") (determined by the Civil Code). It is therefore preferable, in order to avoid any futures disputes, to make gifts in accordance with your legal reserve and not to exceed the available share.

Legend

* Free, no-obligation deed that does not require a notary
** Based on taxation in force as of 01/09/2012

Answers to your questions

What are the roles of the beneficiary and donor ?
The beneficiary is the person to whom you make a gift (your child or grandchild for example). The donor is you !


As a donor, can I make several payments ?
Of course! Each new payment is equivalent to a new gift. You only need to make sure of the total amount of these successive gifts, because the tax authorities take into account the full tax allowance. In the event of a gift to a child, the combination of these gifts should not exceed €100,000* for 15 years so as to qualify for total exemption from transfer duties. In the event of a gift to a grandchild, this allowance amounts to €31,395*.


Why is it recommended to perform a gift ?
A gift is a tangible asset (money, for example) made from one person to another that does not require any special administrative formality. There is no obligation to see a notary in order to do so, only a declaration to the tax authorities is required.
In addition, the advantage of a gift is that the taxable amount (meaning the value of the given asset) is stopped on the day when the gift is communicated by the beneficiary to the tax authorities. If the gift is declared several years after it is made, the retained value is that on the day of the declaration. If the asset has a high value, the transfer duties may therefore be higher.
Finally, an additional advantage is to benefit from a reduction in duties related to the age regarding gift. If, for example, the gift is made when you are 50 years of age and the amount exceeds the allowance, the transfer duties shall be reduced by 50%. If this same gift is made 20 years later, the reduction in transfer duties can only be 30%.


What is the taxation of life insurance policy* products ?
During the term of the policy (or subscription) :
As long as no buyback is made, the products** are not subject to income tax. On the other hand, if you are subject to the Solidarity Tax on Wealth (ISF) each year, you are required to declare the buyback value of your policy on 1 January.
Total or partial buyback of the savings :
Only the portion corresponding to the products is subject to progressive income tax, or as an option by the policyholder (or subscriber), a standard income tax rate deduction the rate of which varies according to the term of the policy (or subscription) :

  • - 35% on products of a buyback made before 4 years,
  • - 15% on products of a buyback made between 4 and 8 years.
  • - 7.5% for more than 8 years after the annual allowance of €4,600 for someone who is single or €9,200 for a married couple filing a joint tax declaration (all policies).
    • In addition, all policy related products are subject to social levies.


      What is the taxation of your life insurance policy in the event of death ?
      In the case of death, the capital shall be transferred to any beneficiaries you have designated, under the following conditions :

      • - The capital is fully exempt from inheritance and 20% tax when the beneficiary is the spouse of the insured or a partner under a civil solidarity pact (PACS), or, under certain conditions, a brother or sister.
      • - For the other beneficiaries :
        If payments are made before the 70th birthday of the insured: application of the 20% tax on the death benefit, after a global allowance of €152,500 per beneficiary (all policies);
        If payments are made after the 70th birthday of the insured: the sum of payments made is subject to inheritance tax after an allowance of €30,500 per insured (all policies).

      In addition, if the policy terminates by the death of the insured, the policy related products are subject to social levies.


      What is the reserved and available portion of an estate ?
      The reserved portion of an estate is part of the estate transmitted to heirs entitled to compulsory portions by law. Since 1 January 2007, only children (or grandchildren) of the surviving spouse are compulsory heirs. Parents are no longer compulsory heirs. Compulsory heirs cannot be disinherited.
      The disposable portion is opposed to the hereditary reserve. This is part of the estate of a person that can be freely transferred to persons of their choice in whatever proportions they wished.