Taxation Of Life Insurance.

Life Insurance.

The life insurance is one of the investments the most chosen because of the benefits it generates. Among these, we mainly talk about taxation.

When certain means of investment for retirement are dissimilar, life insurance benefits from privileged taxation.

Life insurance also values ​​the amounts saved in order to be able to capitalize.

Life insurance provides a future on the financial side when you stop working because it is another source of income.

On the other hand, the latter differs for several reasons: the type of cover adopted, the duration of the contract, the conditions on death.

Lump-Sum Levy.

This type of license allows the salary tax to be fixed at a single percentage that does not depend on the income of a household.

He is opposed to the progressive scale of the IR which determines the royalty compared to the earnings of each household.

For example, in the case of an investment in life insurance after 8 years of savings, the rate is 7.5% .

To arrive at the final withholding charge , you must go through the simple final surcharge.

It is so called because it allows you to get rid of all tax obligations . The person liable no longer pays anything after the deduction has been paid.

On the one hand, there is also another means of charging known as “non-discharging”.

Unlike the first type, this is determined in relation to the income of taxable persons.

As an illustration, the rate charged to an investor who has received a dividend is 21% .

In this case, he must pay this tax.

Thereafter, this contribution will be deducted from the tax payable next year.

Income Tax

The tax on income or IR , as its name, is based on capital gains and profits. It affects an individual, a household, a non-profit establishment.

This charge was put in place in France in order to make its tax system more modern. It has undergone various modifications to date.

Indeed, this contribution relates to the assets on which the remuneration of their owners can be estimated.

This includes land and especially buildings.  

For businesses, the excise concerns corporate taxes. However, for households, it affects several fields and categories.

It includes: the General Social Contribution (CSG), the Contribution for the repayment of social debt (CRDS) and the Personal Income Tax (IRPP)

Abatement After 8 Years.

In life insurance , it is possible to make decommitments when the saver feels the need , that is to say at any time. Before that, between 0 to 4 years, the tax is set at 35%.

Between 5 to 8 years, it is 15%. This is from the 8 th year it becomes more advantageous.

The rate is reduced to 7.5%. In other cases, taxpayers’ acquittals and withdrawals are tax exempt.

A buy-back, for example, consists of part of the amount paid during the contract.

On the one hand, there are also the revenues that this generates. Tax is therefore taken from these profits.

For a single person, the excise is calculated after an annual allowance of € 4,600 and € 9,200 for a couple.

If the sum exceeds this limit, the taxpayer has the choice between the flat-rate levy and integrate his interests into the IR scale or income tax .

Social Contributions.

Also called social contributions, this type of levy is used to invest in social protection.

These taxes are drawn from two kinds of financial gain: that of activities and replacement and that of wealth and investment.

This concerns employees as well as the self-employed from their wages, benefits in kind or in cash, agricultural profits, salaries, BNC or BIC and different bonuses.

This process is applied to all taxpayers living in France. Their remuneration must be subject to community charges.

Those who operate outside the country owe a percentage of their income to the CSG (Generalized Social Contribution) and CRDS (Contribution to the repayment of social debt.

Aside from these two kinds of taxation, there is also the solidarity tax, the social levy set at 4.5% and the additional one.