French life insurance tax in 2026: withdrawals, allowance and rates

• Only gains are taxed, at withdrawal. The money you paid in comes out tax-free.
• After eight years: an annual allowance of €4,600 (€9,200 for a couple), then 7.5% income tax up to €150,000 of payments, 12.8% above.
• Social charges stay at 17.2% on assurance vie in 2026, while they rise to 18.6% on most other investment income.
• A partial withdrawal is not all gain: only the share of gains in the policy is taxed, pro rata.

Assurance vie, France's favorite savings wrapper, has a reputation for complicated taxation, because it depends on three things at once: the policy's age, the date of each payment and the total amount paid in. For most savers it boils down to a simple rule, though: a policy opened more than eight years ago, funded since 2017 and under €150,000 of payments pays almost no income tax as long as the gains withdrawn stay under the allowance.

This guide covers the 2026 rates, the special case of social charges, how to calculate the tax on a partial withdrawal with a worked example, withholding and filing, the choice of the progressive scale, the exemptions, and what happens on death. The rules quoted are those published by service-public.fr, the French government's official guide, with their date. It is written for people who are tax resident in France.

The principle: only gains are taxed, at withdrawal

As long as the money stays in the policy, income tax does not apply: gains build up without being taxed each year, which lets interest earn interest. Tax only comes in at withdrawal, which insurers call a rachat, partial or total, or when the policy matures. And it only applies to gains: the sums you paid in come out tax-free, since they were already taxed.

One exception concerns social charges on the euro fund, which are taken every year when interest is credited to the policy, rather than at withdrawal. They are explained below.

Assurance vie tax rates in 2026

For payments made since September 27, 2017, which covers most policies funded today, rates depend on the policy's age, counted from when it was opened, according to service-public.fr.

That 30% before eight years is now lower than the tax on an ordinary securities account: since January 1, 2026, France's flat tax on investment income reaches 31.4% there, because social charges rose to 18.6%. Assurance vie keeps 17.2%.

The €4,600 or €9,200 allowance

After eight years, gains withdrawn each year are only subject to income tax above €4,600 for a single person and €9,200 for a married or civil-partnered couple filing jointly. The allowance covers all of a household's policies, not each policy, and it renews every year. It only applies to income tax: social charges remain due on all gains.

The €150,000 threshold

The 7.5% rate applies as long as total payments not yet paid back, across all the taxpayer's policies, do not exceed €150,000. Above that total, the share of gains corresponding to payments beyond €150,000 is taxed at 12.8%. The threshold is measured in payments, not in policy value: a €200,000 policy funded with €120,000 of payments stays fully at 7.5%.

Social charges: 17.2%, and the euro fund case

Gains on assurance vie bear social charges at 17.2%, according to service-public.fr, including in 2026. France's 2026 social security financing law raised that rate to 18.6% on most investment income, but assurance vie was left out. Only rente-survie policies and disability savings policies move to 18.6%.

When the charges are taken depends on the investment. On the euro fund, social charges are withheld every year when the insurer credits interest to the policy: at withdrawal, none are left to pay on that interest. On unit-linked funds, they are taken at withdrawal, on the share of gains withdrawn. That is why a euro fund statement shows interest already net of social charges.

Calculating the tax on a partial withdrawal

A partial withdrawal is never made up of gains alone. It contains a share of payments and a share of gains, in the same proportion as the whole policy. The taxable share is calculated as follows: amount withdrawn × policy gains ÷ total policy value. The policy's gains are its value minus the payments not yet paid back.

A worked example

Your policy, opened in 2015 and funded since 2018, is worth €80,000 for €60,000 of payments: it contains €20,000 of gains, a quarter of its value. You withdraw €20,000 in 2026, from unit-linked funds. The share of gains in that withdrawal is 20,000 × 20,000 ÷ 80,000 = €5,000; the remaining €15,000 are payments, which come out tax-free.

The policy is over eight years old and you are single: the €4,600 allowance applies, leaving €400 taxable at 7.5%, or €30 of income tax. Social charges apply to the full €5,000: €860. Total: €890. The same withdrawal from a policy under eight years old would cost €1,500 (30% of €5,000), and the same €5,000 of gains in a securities account in 2026, €1,570 (31.4%).

Withholding and filing

At withdrawal, the insurer withholds a tax prepayment: 12.8% on gains from a policy under eight years old, 7.5% on those from an older policy, on top of the social charges due. It is only a prepayment: the final tax is calculated the following year on the tax return, which applies the allowance and the €150,000 threshold, and any excess is refunded.

Lower-income households can ask to be spared this prepayment: the exemption is available if the reference tax income for the year before last is under €25,000 for a single person or €50,000 for a couple. The request must reach the insurer by November 30 of the year before the withdrawal. For filing, the insurer sends a yearly tax statement (IFU) summarizing the amounts to report: an incorrect pre-filled amount can be corrected.

Progressive scale or flat rate?

On the tax return, you can replace the flat rate with the progressive income tax scale. It pays off if your marginal rate is 0% or 11%, especially for a policy under eight years old, where the flat rate is 12.8%. Careful: the option is global, it applies to all your investment income for the year (interest, dividends, capital gains), not just assurance vie. So decide by looking at the whole picture.

When gains are not taxed

Gains are exempt from income tax, whatever the policy's age, if the withdrawal follows one of these events affecting the policyholder, their spouse or their civil partner: dismissal, early retirement, category 2 or 3 disability, or the end of a self-employed activity after a court-ordered liquidation. The withdrawal must take place before the end of the year following the event. Negotiated contract terminations and the end of fixed-term contracts do not count as dismissal, and social charges remain due.

Payments made before 2017 and older policies

Gains from payments made before September 27, 2017 follow the former regime: after eight years, the same €4,600 or €9,200 allowance, then an optional 7.5% final withholding or the progressive scale; before eight years, an optional final withholding or the scale. Very old policies, taken out before 1983 or between 1983 and September 1997, keep partial exemptions for payments made at the time. A policy that mixes several payment periods is taxed slice by slice: the insurer's IFU does the split.

What happens on death?

On death, assurance vie does not follow the usual French inheritance tax rules. Amounts paid in before the insured person turned 70 benefit from a €152,500 allowance per beneficiary; above that, they are taxed at 20% up to €700,000 per beneficiary, then at 31.25%. Payments made after 70 benefit from an overall allowance of €30,500, shared among all beneficiaries, and the gains they produced are exempt. A surviving spouse or civil partner pays nothing. Choosing the beneficiaries, in the beneficiary clause, matters as much as choosing the investments.

Using assurance vie tax rules well

1. Open a policy early, even with a small payment: the opening date starts the eight-year clock, for all future payments.
2. Use the allowance every year after eight years: withdrawing, and paying back in if needed, gains below €4,600 or €9,200 resets the gains counter with no income tax. Social charges remain due, and a withdrawal followed by a new payment may carry fees.
3. Keep track of your payments: the taxable share of a withdrawal depends on them, and they decide the €150,000 threshold.
4. Look at fees before the tax advantage: 1% a year in management fees costs more over twenty years than the tax difference between two wrappers.

The guide to where to put your money in France in 2026 compares assurance vie with the PEA and an ordinary securities account, and the compound interest calculator shows the effect of fees over time. Tradoshi's portfolio tracking accepts your assurance vie as a declared entry, alongside your other accounts, with your cost basis.

This guide is educational and is neither tax advice nor personalized investment advice. The rules quoted are those in force in November 2026; a particular situation (non-residence, an old policy, large amounts) deserves a professional's opinion.

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