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AXIS Strategy
Consultants

The route to financial security
when living in France
AXIS Strategy Consultants are a
financial advisory group based in
Paris, France. We have been
serving the French expat com-
munity for more than 15 years.
We pride ourselves on our ser-
vice standards and reputation for
courtesy to our clients.
Benefits of Assurance Vie
There are numerous tax concessions on offer.:
No tax on capital gains or income whilst the funds
remain inside the policy
Withdrawals can be made in a tax efficient way
Annual tax free allowance of 4,600 per person for
withdrawals from policies after 8 years
There is approximately 1.5 trillion invested in Assurance
Vie policies, with over 22 million contracts.
It is possible to draw down income at any time from this
investment with varying consequences in terms of taxation.
Should an investor wish to withdraw an amount from their
portfolio, only the growth element of the investment
would be subject to income tax.
The level of tax due on any withdrawal is calculated on the
basis of the growth of the overall investment. Thereafter
the withdrawal is considered to be part capital and part
gain, with tax being calculated as a percentage of the gain
using the same growth factor.
Interesting Insights
One of the most important aspects of living abroad is to
understand which domestic products are appropriate in
terms of financial planning. In France, the three main
taxes that impact expats are as follows:
Income tax
Wealth tax
Inheritance tax
It is necessary to take steps to protect your capital from
such taxes. To this end, a number of banking and insur-
ance products have been developed to help French resi-
dents structure their finances efficiently. For expats, the
most effective of these is the Assurance Vie contract.
The Assurance Vie is an all singing and dancing product
designed for the accumulation and protection of wealth
for investors. It is used as an insurance vehicle that holds
financial investments, and is similar in structure to a Life
Policy in other countries.
Taxation of Assurance Vie
When accessing capital, French life insurance products
are taxed as follows:
Gains realized within the first 4 years - 35% tax
Gains realized between 4 and 8 years - 15% tax
Gains realized after 8 years - withdrawals are tax
free if the amount taken from the policy is no
more than the individual allowance of
4,600 , or 9,200 for a couple per annum.
Any additional withdrawal above these allowanc-
es will be taxed at a maximum rate of 7.5%

In addition to the above rates, a social tax of 15.5%, is levied
on the gain element of the amount withdrawn.
Example Case Study
Sam and Liz have an Assurance Vie policy which
they started 9 years ago with an initial investment of
100,000 . They have not taken any withdrawals to
date; the value of the policy is now 160,000 .
They decide to buy a new car and are in need of
15,000 to pay for it; they opt to withdraw this
amount from their Assurance Vie.
Certification
When they make the withdrawal, they receive a tax
certificate from the insurance company advising them
of how much gain is included in the amount with-
drawn. In this case the policy value has grown by
60%, and the taxable gain element is deemed to be
37.5% (or 5,625 ).
Outcome
As they have been invested for more than 8 years in
the Assurance Vie and are subject to joint taxation,
they will have a tax free allowance of 9,200 between
them. They therefore have no income tax to pay on
the withdrawal.
Additional Insights
Tax payable on withdrawals may be deducted at
source by the insurer before any payout is made. Al-
ternatively, an individual can elect to declare the gain
on their annual tax return, wherein it would be treat-
ed as taxable income.
This may be an attractive proposition if the individual
has a relatively low income; any gain declared as in-
come would thus be taxed at the prevailing tax band
rate.
Possible scenarios
The top rate of income tax in France is currently
45%. As such, it would be in the interest of a higher-
rate taxpayer to have the 35% tax on withdrawals
within the first 4 years deducted at source, rather than
declaring the gain as income.
Investors would re-assess the situation regarding
withdrawals after four years. In the case of someone
with a marginal rate of income tax of 30%, the pre-
ferred option would be to have tax payable on with-
drawals deducted at source, wherein it would be
taxed at 15%
French Inheritance Tax
In the event of death, the proceeds of an Assur-
ance Vie are distributed to the beneficiaries (net of
social taxes). It is however potentially subject to
French inheritance taxes. The following rules apply:
Distributions to the spouse or PACS partner
are exempt from inheritance tax
All other beneficiaries have an Assurance Vie
tax-free allowance of 152,500 per person, on
the provision that investments were not made
after the policy holders 70th birthday
Any additional Assurance Vie distributions
above these allowances are taxed at 20%, with
an upper rate of 31.25% being applied to distri-
butions in excess of 852,500 .
The Assurance Vie can also be used to exempt
investors from French wealth tax on their assets held
outside France for the first five years of residency.

A flexible life policy that will remain in force
should you relocate to another EU country
Tax efficient growth on your savings
Policy documentation in English
Assurance Vie products continue to be an attractive
proposition for expats living in France. It is important
that individuals gain as much information as possible
on the market providers and the particulars of the
schemes on offer.
Please let us know if we can be of assistance?


The International
Assurance Vie
Residents of France are allowed to invest in an Assur-
ance Vie with financial institutions domiciled in any
EU country, as long as the product is compliant with
French legislation.
Expat investors based in France can thus enjoy the
same tax-breaks when choosing a Dublin or Luxem-
bourg based Assurance Vie, whilst also benefiting
from the flexible investment structures that internation-
al companies have to offer.
The International Assurance Vie offers French expat
residents the following advantages:
Ability to hold an extensive choice of assets in your
investment portfolio including mutual funds and
bonds, along with individual stocks
Access to a wide range of leading fund managers
Ability to invest in currencies other than the Euro
e.g. Sterling and USD
Contact Us
AXIS Strategy Consultants
59 Avenue Victor Hugo
75016 Paris, France
(00) 33 1 3970 9854
info@axis-finance.com
Visit us on the web:
www.axis-finance.com