You moved from Britain to France, you bought or rented your home here, you pay tax here, and at some point your bank adviser mentions the assurance-vie. The name is a trap for English speakers. An assurance-vie is not life insurance as you know it from the United Kingdom. It is a French savings contract taken out with an insurer: you pay in money, it grows inside the contract, and when you die the insurer pays a capital sum directly to the people you named in a document called the clause bénéficiaire, the beneficiary clause. For a British resident in France after Brexit, this contract does three jobs at once. It lets money pass outside the normal succession, which matters because French forced heirship rules and English expectations about testamentary freedom often collide. It gives your spouse or civil partner a tax shelter that few other French vehicles can match. And it creates its own tax bills, with its own allowances and rates, which surprise families who assumed that a contract sold as flexible and lightly taxed meant lightly taxed for everyone. This article explains the mechanism in full, works through the figures, maps the British-specific traps around domicile and double taxation, and sets out what to do when the insurer will not pay, when the tax office reassesses, or when children left out of the clause attack the contract. It is written for a British reader living in France, it explains every French term the first time it appears, and every decisive legal statement is backed by the exact text it comes from.

I. Your assurance-vie when you die in France: what passes outside the succession

A. Who gets the capital outside the succession and how to word the beneficiary clause

The starting point is a rule that surprises most British families. When the policyholder, the assuré, dies, the capital or annuity payable to a named beneficiary is not part of the estate at all. Article L132-12 of the Insurance Code (Code des assurances) states: “Le capital ou la rente stipulés payables lors du décès de l’assuré à un bénéficiaire déterminé ou à ses héritiers ne font pas partie de la succession de l’assuré. Le bénéficiaire, quelles que soient la forme et la date de sa désignation, est réputé y avoir eu seul droit à partir du jour du contrat, même si son acceptation est postérieure à la mort de l’assuré.”

In plain terms, the beneficiary is treated as having owned the right to that money from the day the contract was signed, even if they only accepted the benefit after the death. The money never enters the pool that the notaire, the French public officer who settles every succession with French assets, divides between the heirs. This is why the assurance-vie is the favourite tool of couples who want the surviving spouse to receive liquid money quickly, without waiting for the full succession to be wound up and without sharing that particular capital with the children at that stage.

The protection goes further. Article L132-13 of the same Code states: “Le capital ou la rente payables au décès du contractant à un bénéficiaire déterminé ne sont soumis ni aux règles du rapport à succession, ni à celles de la réduction pour atteinte à la réserve des héritiers du contractant. Ces règles ne s’appliquent pas non plus aux sommes versées par le contractant à titre de primes, à moins que celles-ci n’aient été manifestement exagérées eu égard à ses facultés.”

Two French succession concepts need explaining here. The rapport à succession is the duty of an heir who received lifetime gifts to bring them back into the account when the estate is divided, so that equality between heirs is preserved. The réserve héréditaire, the reserved share, is the fraction of the estate that French law guarantees to the children and that no will or gift can take away. Article L132-13 takes the assurance-vie payout outside both mechanisms. Children cannot demand that the capital be brought back into the division, and they cannot claim that it eats into their reserved share, with one single exception: premiums that were manifestly excessive in light of the policyholder’s means. That exception is where most disputes come from, and Part II below studies it through two real court decisions so you can judge your own position honestly.

For spouses and civil partners, the shelter is close to complete. Under French succession duty as such, Article 796-0 bis of the General Tax Code (Code général des impôts) provides: “Sont exonérés de droits de mutation par décès le conjoint survivant et le partenaire lié au défunt par un pacte civil de solidarité.”

The surviving husband, wife or pacsé partner, meaning the partner bound by a pacte civil de solidarité, the French registered civil partnership, pays no French death duties. And the specific levy on assurance-vie payouts mirrors that outcome, because Article 990 I of the same Code states that “Le bénéficiaire n’est pas assujetti au prélèvement visé au premier alinéa lorsqu’il est exonéré de droits de mutation à titre gratuit en application des dispositions des articles 795 , 795-0 A , 796-0 bis et 796-0 ter .” A spouse or pacsé partner who is exempt from death duties is therefore also free of the insurance levy. Naming your spouse as beneficiary of contracts funded before your seventieth birthday moves up to the full allowance per beneficiary completely free of French tax at death, which is why advisers describe the assurance-vie as the surviving spouse’s best friend.

Everything turns on the drafting of the clause bénéficiaire. A standard clause names the spouse first and the children born or to be born second, but standard wording fails more often than banks admit. If the clause names your husband or wife without further detail and you later divorce, the former spouse can still collect unless you rewrote the clause, because the designation survives the divorce by default. If the clause says “my children” and a child predeceases you leaving grandchildren, representation is not automatic in the way it is for intestate succession, so the grandchildren can be left out where you meant to include them. If you want the surviving spouse to enjoy the income while preserving the capital for the children, the clause can split the benefit, giving the usufruit, the lifelong right to use the money and take its income, to the spouse and the nue-propriété, the bare ownership that becomes full ownership when the usufruit ends, to the children. The tax code itself organises this split, since Article 990 I provides that “En cas de démembrement de la clause bénéficiaire, le nu-propriétaire et l’usufruitier sont considérés, pour l’application du présent article, comme bénéficiaires au prorata de la part leur revenant dans les sommes, rentes ou valeurs versées par l’organisme d’assurance, déterminée selon le barème prévu à l’ article 669 .” Each of the two holders is then taxed on their share and shares the allowances in the same proportions. Review the clause after every birth, death, marriage, divorce or move, keep a copy outside the bank that sold the contract, and tell the notaire settling the succession that the contracts exist, because a perfect clause that nobody finds helps nobody. Readers who have not yet organised the rest of their French estate should read this alongside our guide to choosing English law for a French house, keeping children protected and unblocking a succession (British Will, French House After Brexit: Choosing English Law, Keeping Your Children Protected, and Challenging a Blocked Succession), since the will and the beneficiary clause must point in the same direction. The administration’s own starting point for beneficiaries is the official beneficiary page of the tax office (Je suis bénéficiaire d’une assurance-vie, comment la déclarer) and the public service fact sheet on the contract (Assurance-vie sur service-public.fr).

B. How much tax each beneficiary pays: the 152,500-euro allowance, the 20 and 31.25 per cent levy, and the over-70 rule

France runs two completely different tax regimes for assurance-vie death benefits, and the dividing line is the seventieth birthday of the policyholder. Premiums paid before the age of seventy fall under Article 990 I. Premiums paid after seventy fall under Article 757 B. The two regimes do not mix, they do not share allowances, and confusing them is the most expensive mistake a British family can make, because money paid in at sixty-nine and money paid in at seventy-one obey different laws.

Under Article 990 I, each beneficiary starts with a fixed allowance of 152,500 euros on what they receive from the contracts of the same deceased person. The Code states that the taxable sums are taken “diminuée d’un abattement proportionnel de 20 % pour les seules sommes, valeurs ou rentes issues des contrats mentionnés au 1 du I bis et répondant aux conditions prévues au 2 du même I bis, puis d’un abattement fixe de 152 500 €”, with the extra proportional relief reserved for qualifying investment contracts, and then: “Le prélèvement s’élève à 20 % pour la fraction de la part taxable de chaque bénéficiaire inférieure ou égale à 700 000 €, et à 31,25 % pour la fraction de la part taxable de chaque bénéficiaire excédant cette limite.” Take a worked example at 2026 scale. A mother resident in Lyon dies leaving one assurance-vie contract funded entirely before seventy, worth 400,000 euros, with her adult daughter as sole beneficiary. Subtract the 152,500-euro allowance and 247,500 euros remain taxable, all of it below the 700,000-euro threshold, so the levy is 20 per cent, which is 49,500 euros, and the daughter receives 350,500 euros net of that levy. Give the same mother two children as equal beneficiaries instead, and each receives 200,000 euros, each deducts their own 152,500-euro allowance, each is taxed at 20 per cent on 47,500 euros, which is 9,500 euros each, so the family pays 19,000 euros in total instead of 49,500. Splitting beneficiaries multiplies allowances, and this arithmetic explains why advisers urge parents to name several beneficiaries rather than leaving everything to one child.

Premiums paid after the seventieth birthday obey Article 757 B, which is harsher in structure even though it sounds gentler. The article provides that “Les sommes, rentes ou valeurs quelconques dues directement ou indirectement par un assureur, à raison du décès de l’assuré, donnent ouverture aux droits de mutation par décès suivant le degré de parenté existant entre le bénéficiaire à titre gratuit et l’assuré à concurrence de la fraction des primes versées après l’âge de soixante-dix ans.” Only the premiums paid after seventy go back into the ordinary death-duty calculation, with tax computed according to the family link between the beneficiary and the deceased, and with one shared allowance for all contracts on the same life: “L’ensemble des sommes, rentes ou valeurs visées au I dues à raison du ou des contrats conclus sur la tête d’un même assuré fait l’objet d’un abattement global de 30 500 €.” Note the three differences from the under-seventy regime. The 30,500-euro allowance is global, shared between all beneficiaries, not per beneficiary. The growth and interest earned inside the contract on those late premiums escape duty entirely, because only the premiums themselves, not what they earned, are taxed. And the surviving spouse or pacsé partner still pays nothing, thanks to the exemption quoted above. A second worked example shows the mechanics. A father pays 200,000 euros of premiums after seventy and the contracts earn 40,000 euros of growth, so 240,000 euros are paid out to his son. Only the 200,000 euros of premiums count. Subtract the global 30,500-euro allowance and 169,500 euros remain. That sum then enters the ordinary parent-to-child death-duty scale, where Article 779 of the General Tax Code grants that “il est effectué un abattement de 100 000 € sur la part de chacun des ascendants et sur la part de chacun des enfants vivants ou représentés par suite de prédécès ou de renonciation.” After that 100,000-euro child allowance, roughly 69,500 euros are taxed at the progressive parent-child rates, a bill in the low teens of thousands of euros, while the 40,000 euros of growth pass completely free. Fund the same 200,000 euros at sixty-nine instead of seventy-one and the bill follows the 990 I route with its per-beneficiary 152,500-euro allowance instead. Timing is everything, and money moved just before or just after the birthday changes the law that applies to it.

II. British in France with assurance-vie: domicile, United Kingdom tax and how to challenge a refusal or reassessment

A. Where you are taxed, what the United Kingdom still takes, and the lifetime traps: withdrawals and manifestly excessive premiums

The French levy does not ask for your passport. It asks where people live. Article 990 I provides that “Le bénéficiaire est assujetti au prélèvement prévu au premier alinéa dès lors qu’il a, au moment du décès, son domicile fiscal en France au sens de l’article 4 B et qu’il l’a eu pendant au moins six années au cours des dix années précédant le décès ou dès lors que l’assuré a, au moment du décès, son domicile fiscal en France au sens du même article 4 B.” Two hooks therefore exist. If the deceased lived in France for tax purposes at death, France taxes the payout wherever the beneficiary lives, including a son or daughter who stayed in Manchester or Edinburgh. If the deceased lived in Britain but the beneficiary lives in France and has done so for at least six of the last ten years, France taxes the beneficiary on the payout. A British family spread across the Channel can therefore face French tax even when the money, the insurer and the deceased all look English on paper, and the only question that matters is tax domicile, the domicile fiscal.

French tax domicile itself is defined by Article 4 B of the General Tax Code, which provides: “1. Sont considérées comme ayant leur domicile fiscal en France au sens de l’article 4 A : a. Les personnes qui ont en France leur foyer ou le lieu de leur séjour principal ; b. Celles qui exercent en France une activité professionnelle, salariée ou non, à moins qu’elles ne justifient que cette activité y est exercée à titre accessoire”. The foyer means the permanent home, the place where the family habitually lives, and the séjour principal means the country where you spend most of the year. A retired Briton who sold the house in Kent, rents or owns in the Dordogne, is registered with the French health system and spends ten months a year in France is domiciled in France for tax purposes even while keeping a British passport, a British bank account and a vote in Britain. Meeting any single one of the statutory tests is enough, so working in London two days a week does not save a person whose family home and main presence are in France. Pin down domicile before doing any arithmetic, because every allowance and every rate in Part I depends on it.

The British side of the picture must then be mapped separately, and this is where families need advisers on both sides of the Channel rather than a single calculation. The United Kingdom runs its own inheritance tax on its own concepts, centred on domicile in the English legal sense, which is a different and stickier notion than French tax domicile, and on the location of the assets. A British national living in France can remain domiciled in England for United Kingdom purposes for years after the move, which means the British tax authority can look at the same death and raise its own bill on the worldwide estate while France levies its own charges on the French-connected sums. The two systems compute independently, reliefs on one side do not automatically cancel charges on the other, and credit mechanisms and treaty positions have to be checked file by file rather than assumed. Start with the British government’s own guidance on when inheritance tax is due (Inheritance tax on GOV.UK) and on how foreign income and pensions are treated (Tax on foreign income and pensions on GOV.UK), then put the French notaire and a British tax adviser in contact with each other before anyone signs a beneficiary clause or surrenders a contract. The cost of that double check is small next to a 31.25 per cent French levy landing on money the family had already reserved for a United Kingdom bill.

Two lifetime traps catch British policyholders while they are still alive. The first is the withdrawal, the rachat. Money taken out of the contract during your lifetime is taxed as income on the growth slice it contains. Article 125-0 A of the General Tax Code states: “Les produits attachés aux bons ou contrats de capitalisation ainsi qu’aux placements de même nature souscrits auprès d’entreprises d’assurance établies en France sont, lors du dénouement ou d’un rachat du bon, contrat ou placement et quelle que soit sa date de souscription, soumis à l’impôt sur le revenu.” The growth portion of every partial or total surrender is therefore income in the year of withdrawal, with the detailed treatment depending on the age of the contract and the options chosen, and a British resident declares that growth in France under the treaty allocation of taxing rights rather than assuming the bank withheld everything correctly. The second and subtler trap is surrendering the old contract altogether. The Court of Cassation, the Cour de cassation, France’s highest court for civil matters, held on 9 February 2022 in decision number 20-18.544, published in its official Bulletin (Cass. 1re civ., 9 February 2022, no. 20-18.544), that: “Ce texte ne s’applique pas aux primes versées sur un contrat d’assurance sur la vie racheté par son souscripteur.” Once the policyholder has surrendered the contract and taken the money back, the shield of Article L132-13 no longer covers those premiums. The same decision recalls the test for the exception, approving judges who had assessed the payment “eu égard à l’âge du souscripteur, à sa situation patrimoniale et familiale et à l’utilité que revêtait pour lui l’opération”, meaning with regard to the age of the policyholder, their financial and family situation, and the usefulness of the transaction for them. Surrendering a contract to chase a better rate can therefore destroy the succession protection you spent years building, and any surrender late in life should be weighed against the age-seventy tax boundary and the state of your health with advice taken first.

The manifestly excessive premium cases deserve a closer look, because children who feel disinherited bring them constantly and insurers watch them nervously. The courts weigh the premium against the whole picture at the time it was paid: the age and health of the policyholder, the size of the estate left behind for the heirs, the income the policyholder kept to live on, and whether the contract served a genuine savings or protection purpose or merely emptied the estate on the eve of death. A retired person of modest means who pours nearly all liquid savings into a contract for a new partner weeks before dying invites requalification, while a wealthy subscriber who places a fraction of a large portfolio for a spouse routinely survives challenge. The Paris Court of Appeal gave a clear example on 7 December 2022 in case number 20/15358 (CA Paris, 7 December 2022, no. 20/15358), holding that a single premium paid in June 2017 on a marketed savings contract “est manifestement exagérée au sens des dispositions de l’article L.132-13 du code des assurances”, and ordering that the disputed part “sera réintégrée à l’actif successoral”, meaning brought back into the estate assets, to the extent of 41,876.80 euros. The lesson for a British policyholder is practical. Fund the contract steadily while healthy, keep written evidence of your means at the time of each payment, retain enough outside the contract to live on and to leave the children something visible, and record in plain words the purpose of the contract, whether protecting a spouse, balancing unequal gifts between children, or earmarking money for care in old age. A file that shows purpose and proportionality beats a bare transfer every time the heirs instruct a lawyer.

B. Insurer refuses to pay, tax office reassesses, children attack the policy: your remedies step by step

Start with the most urgent scenario. The death has occurred, the beneficiary files the claim, and the insurer stalls or refuses. French insurers routinely ask for the death certificate, proof of identity and beneficiary status, the original or a copy of the contract and the clause, and a sworn statement about allowances already used. That last document has a legal basis, because Article 990 I states: “Le bénéficiaire doit produire auprès des organismes d’assurance et assimilés une attestation sur l’honneur indiquant le montant des abattements déjà appliqués aux sommes, rentes ou valeurs quelconques reçues d’un ou plusieurs organismes d’assurance et assimilés à raison du décès du même assuré.” The 152,500-euro allowance is per beneficiary across all contracts of the same deceased person, so the insurer needs that statement to withhold correctly, and a beneficiary with several contracts who stays silent creates the very delay they complain about. The insurer is also the tax collector here, since Article 990 I provides that the levy “est dû par le bénéficiaire et versé au comptable public compétent par les organismes d’assurance et assimilés”, and that it is paid “dans les quinze jours qui suivent la fin du mois au cours duquel les sommes, rentes ou valeurs quelconques dues par eux ont été versées aux bénéficiaires à titre gratuit.” A refusal therefore usually has an identifiable cause: a missing allowance statement, an ambiguous clause with two people claiming the same rank, a dispute about whether premiums after seventy or before seventy are involved, or suspicion of fraud or money laundering checks that the insurer must run by law. Answer in writing, send every document by traceable means, set the insurer a clear deadline, and keep copies of everything. If the written complaint to the insurer’s claims department fails, the next step is the insurance mediator, the médiateur de l’assurance, an independent ombudsman whose involvement costs nothing and often unlocks files stuck in legal departments. If mediation fails or the sums justify it, the beneficiary sues the insurer before the judicial court, the tribunal judiciaire, for performance of the contract plus default interest and, where the resistance was abusive, damages. Interest for late payment and the documented costs of the delay are routinely claimed alongside the capital, so the file should record each date, each letter and each promised callback from the start.

The second scenario is the tax reassessment. The beneficiary declared the payout, or the insurer withheld the levy, and months later the tax office sends a proposal to put the sums back into the succession or to deny an allowance. Typical grounds include premiums reclassified as manifestly excessive, post-seventy premiums that the family presented as pre-seventy payments, allowances claimed twice across several contracts, or domicile challenged because the deceased kept a house in Britain. Do not let the deadline on the letter pass while gathering papers. The French procedure gives the taxpayer a formal right to answer the proposed rectification before it becomes final, so reply within the stated time, contest each ground with documents, and attach the contract history, proof of payment dates, bank statements showing your means at the time, and the allowance statements. If the administration maintains the charge, file a formal claim, the réclamation contentieuse, and then, if rejected expressly or by silence, take the dispute to the administrative or judicial judge according to the nature of the levy. Throughout, compute both regimes yourself. We see files where the office applied Article 757 B to the whole payout including growth, where only the late premiums were taxable, and files where the 152,500-euro allowance was forgotten for one of two contracts. A short counter-calculation with the exact quotes from Part I, sent with the reply, resolves a surprising number of cases without a courtroom.

The third scenario is the family attack. Children who received little or nothing ask a lawyer to bring the assurance-vie back into the estate, arguing that the premiums were manifestly excessive or that the contract was a sham donation dressed as insurance. They sue the beneficiary, sometimes also the insurer, seeking reduction of the excessive part and its return to the divisible estate. The defence runs on the criteria the Court of Cassation approved: age, financial and family situation, usefulness of the transaction, proportionality of the premiums to the estate, and genuine insurance purpose rather than fraud on the reserved share. Practical defence work starts the day the contract is taken out, not the day the writ arrives. Keep the subscription documents, the medical questionnaire if any, the annual statements showing the estate retained outside the contract, evidence of income and of care needs, and the written reasons for the chosen beneficiaries. Where the attack has real force, because a very large premium was paid very late in life leaving children nearly empty-handed, negotiation has value: offering a balancing payment or recognising a partial reduction can save years of procedure and preserve what the contract was built for, namely the protection of the surviving spouse. Where the attack is speculative, the decisions quoted in this article give the court the framework to dismiss it, provided the file proves proportionality rather than merely asserting it.

A final procedural point matters for British families in particular. Claims, mediations and court actions in France run in French, under French time limits, and service of documents on a beneficiary living in Britain follows cross-border rules that add weeks. A beneficiary who moved back to the United Kingdom after the death should give the notaire and the insurer a French address for service where possible, whether a relative, a representative or a lawyer’s office, diarise every deadline on receipt rather than on reading, and never ignore a French court letter because it arrived in a foreign language. Where the estate spans both countries, the French succession lawyer and whoever handles the English probate should exchange the grant of probate, the death certificate with its apostille, and the list of French contracts early, so that neither side distributes on the assumption that the other side has nothing to distribute.

Conclusion

The assurance-vie remains the most powerful planning tool a British resident in France can hold, but only when each of its three layers is handled deliberately. The civil layer takes the capital outside the succession and outside the children’s reserved share, unless premiums were manifestly excessive in light of your means. The tax layer divides the world at your seventieth birthday, with a per-beneficiary allowance of 152,500 euros and a levy of 20 per cent rising to 31.25 per cent before that age, and with ordinary death duties on late premiums softened by a global allowance of 30,500 euros and the complete exemption of the surviving spouse or civil partner after it. The cross-border layer adds French domicile tests that catch the unwary, a separate British tax analysis that must be run in parallel, and lifetime decisions on withdrawals and surrenders that can build or destroy the whole structure. Draft the beneficiary clause as carefully as a will, fund the contract steadily while documenting your means, review everything after each family event, and answer any refusal or reassessment in writing, with figures and with the exact texts, from the first letter. Built that way, the contract does what generations of French savers bought it for: it protects the person you chose, it costs the family the least tax the law allows, and it survives the challenges that follow every badly prepared death.