For many British residents in France, the French assurance-vie (a long-term life-insurance savings contract) is the single most useful estate-planning tool available after Brexit. Properly drafted, it lets you pass up to 152,500 euros to each beneficiary outside the succession, protect a spouse or partner who would otherwise be exposed to French forced-heirship rules, and keep the family home out of a lengthy probate dispute. Poorly drafted, it produces the opposite: children who challenge the premiums as excessive, an insurer who refuses to pay, or a tax bill that wipes out the expected advantage. This guide explains, in plain English and with the exact legal texts, how the mechanism works for a British person living in France, how to draft a beneficiary clause that survives a challenge, and what to do when the insurer or the tax office says no.
I. How does a French assurance-vie protect your spouse and cut succession tax after Brexit?
The starting point is a rule that surprises most British readers. Under French law, the money paid out on death under a life-insurance contract does not legally belong to the deceased person’s estate. Article L132-12 of the Code des assurances (Insurance Code) provides, word for word: “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 other words, the beneficiary is deemed to have held the right personally since the day the contract was signed, even if he or she only accepted after the death. That is why the capital escapes the ordinary succession rules: no waiting for the notaire (the French public officer who settles estates) to distribute the estate, no division between heirs, and no exposure to the claims of the deceased’s creditors in most cases.
For a British couple who moved to France after Brexit, this feature matters more than it does for a French couple. If you are habitually resident in France, French succession law normally governs your whole estate, including assets in England, unless you chose English law in your will. That choice is examined in detail in our guide to choosing English law for a French house and protecting children from a blocked succession. The assurance-vie works alongside that choice: whatever law governs your succession, the insurance capital passes directly to the person you named, provided the clause is valid and the premiums were not abusive. It is therefore the cleanest way to secure your spouse’s position quickly, because the insurer pays the beneficiary directly instead of routing the money through the estate.
The second pillar is fiscal. Because the capital is outside the succession, it is not subject to ordinary inheritance tax at the progressive family rates. Instead, two special regimes apply depending on when the premiums were paid. Premiums paid before the policyholder’s seventieth birthday fall under article 990 I of the Code général des impôts (General Tax Code): after an exempt slice of 152,500 euros per beneficiary, the statute states that “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.” Premiums paid after the seventieth birthday fall under article 757 B of the same Code, which provides that the sums due by the insurer “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”, with the whole of the contracts on the same life sharing one overall exempt slice: “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 €.” The two regimes are mutually exclusive for any given sum, and the boundary between them is the policyholder’s seventieth birthday, not the date the contract was opened.
A. Why does the capital fall outside the succession yet still face a special levy?
The distinction between civil law and tax law is the key to the whole subject, and British readers need to grasp it early because it has no equivalent in England. On the civil side, the capital is not part of the estate, so your children cannot demand that it be shared out, and the surviving spouse named as beneficiary receives the full amount without competing with the children. On the tax side, the State takes its share through the two special levies described above. The result is often far kinder than ordinary succession, particularly for a spouse: article 796-0 bis of the Code général des impôts states that “Sont exonérés de droits de mutation par décès le conjoint survivant et le partenaire lié au défunt par un pacte civil de solidarité.” A surviving husband, wife or PACS partner (the French civil partnership) therefore pays nothing on the insurance capital, whether it falls under article 990 I or article 757 B, because the final paragraph of article 990 I expressly sends exempt beneficiaries outside the levy. For unmarried partners who never signed a PACS, the position is harsher, and the assurance-vie becomes even more valuable: a cohabiting partner who inherits under a will pays 60% tax after a tiny allowance, while the same person named in an assurance-vie clause uses the 152,500 euro exempt slice first.
Your residence position decides whether France can tax the contract at all. Article 4 B of the Code général des impôts treats as fiscally domiciled in France anyone who has here “leur foyer ou le lieu de leur séjour principal”, that is, their household or principal place of stay. If you live year-round in the Dordogne or in Paris with your family, you meet that test, and article 990 I applies in full to your contracts. The statute also catches the reverse situation: even if you moved back to England, the levy still applies when the beneficiary was fiscally domiciled in France for at least six of the ten years before the death. British leavers should therefore check the position of each beneficiary, not only their own, before assuming that a return to the United Kingdom removes French tax from the picture.
Brexit added a layer that did not exist when Britain was in the European Union. A contract taken out with a French insurer is unaffected in daily life, but many British expatriates hold Luxembourg contracts sold in France under European passporting rules, which continue to operate under their own supervision framework. The tax treatment in France is identical whatever the insurer’s home State, because articles 990 I and 757 B look at the residence of the policyholder and the beneficiary, not at the flag on the insurer’s letterhead. What changed is practical: information exchange with HM Revenue and Customs now runs through international treaties rather than automatic Union machinery, and British advisers can no longer rely on European rules to sell into France. For the reader, the lesson is simple: keep a French tax file for every contract, wherever the insurer sits, and declare each policy properly.
The United Kingdom side cannot be ignored either. If you kept your domicile of origin in England, or acquired a UK domicile of choice, HMRC may still treat the French contract as part of your worldwide estate for British inheritance tax, even though France sees the same capital as outside the succession. The two systems do not mirror each other, and the 1963 Franco-British succession convention does not cover life-insurance wrappers in the way it covers houses and bank accounts. The overview on the official British site, gov.uk inheritance tax, is the starting point for the UK analysis, but the interaction between the French levies and any British charge needs coordinated advice in both countries before you subscribe, not after the death. One practical consequence is already certain: paying the French levy does not automatically erase the British bill, so large families should model both taxes together when they choose between topping up the assurance-vie and keeping money in a British pension, a comparison developed for pension savings in our analysis of the 25% lump sum France still taxes and the Crown pensions France cannot tax.
B. How do the 152,500 euro allowance, the spouse exemption and the over-70 rule work in practice?
Take a concrete example. A British widow aged 66, resident in Lyon, pays 400,000 euros of premiums into a single assurance-vie before her seventieth birthday and names her two adult children as equal beneficiaries. On her death, each child receives 200,000 euros. The first 152,500 euros per child is fully exempt, so each child is taxed only on 47,500 euros at 20%, which is 9,500 euros. The total levy is 19,000 euros on 400,000 euros transmitted, an effective rate below 5%. If the same 400,000 euros had passed through an ordinary succession to two children, the ordinary allowances and progressive scale would have produced a far heavier bill. Naming more beneficiaries multiplies the exempt slices, because the 152,500 euro allowance is granted per beneficiary and per deceased policyholder across all of his or her contracts combined. Splitting 450,000 euros between three children therefore shelters 457,500 euros in total and leaves nothing taxable, while giving the whole sum to one child leaves 297,500 euros exposed at 20%.
The spouse exemption changes the calculation completely. Had the Lyon widow named her husband instead, he would have received the 400,000 euros with no French levy at all under article 796-0 bis, and the children’s position would then depend on the rest of the estate. This is why advisers describe the assurance-vie as the surviving spouse’s best friend in France: it delivers cash fast, exempt from tax, outside the delays of the succession, and without asking the children to agree. For a British couple where the French house passes under succession rules that protect the children through the réserve héréditaire (the forced share that French law reserves to children), the contract restores balance. Article 913 of the Code civil (Civil Code) caps lifetime gifts and legacies at one half of the estate with one child, one third with two children, and one quarter with three or more, and since the law of 24 August 2021 it even grants children a compensatory levy on French assets where the applicable foreign law offers no reserve protection. The assurance-vie sits outside that arithmetic for the capital itself, so it is the instrument that lets a British testator favour a spouse without breaking the reserve.
After the seventieth birthday, the maths turn less generous and the strategy must change. Premiums paid from age seventy onwards re-enter ordinary inheritance tax by degree of kinship under article 757 B, with only one shared allowance of 30,500 euros for all contracts on the same life. A British retiree who pays 100,000 euros at age 75 and names two children therefore exposes 69,500 euros to the standard parent-child scale after the single 30,500 euro deduction. Growth and interest accrued on those late premiums stay under the 990 I regime in the prevailing administrative reading, but the premiums themselves lose the 152,500 euro shelter. The practical message is timing: fund the contracts generously before seventy, then stop paying premiums and let the capital grow, rather than drip-feeding large sums late in life. Contracts already funded keep their 990 I treatment for the earlier premiums whatever the age at death, so early funding locks in the benefit permanently.
Splitting the beneficiary clause between a spouse and children, or between an usufructuary and bare owners, adds a further tool. When a clause is divided (démembrement de la clause bénéficiaire), article 990 I treats the usufruitier (the person entitled to use the capital and take its income) and the nu-propriétaire (the person who owns the capital but cannot touch it until the usufruct ends) as separate beneficiaries in proportion to their shares, valued under the age-based scale of article 669 of the Code général des impôts, with the 152,500 euro allowances divided in the same proportions. A widow who receives the usufruct of 300,000 euros at age 65, with the children taking the bare ownership, is taxed only on the usufruct slice, and the children only on theirs. Used carefully, this structure gives the survivor lifetime income while moving the capital to the next generation at a discounted taxable value. Used carelessly, with vague wording about who takes what, it generates exactly the disputes examined in the second part of this guide.
II. How do you draft a challenge-proof beneficiary clause and enforce payment?
The standard pre-printed clause found in most French contracts reads: my spouse, failing that my children born or to be born in equal shares, failing that my heirs. It looks reassuring and it is often dangerous for a British family. “My spouse” may catch the wrong person after a divorce and remarriage. “My children” may exclude a stepchild you raised, or include a child you intended to leave out. “My heirs” may drag the capital back towards the succession disputes you wanted to avoid. And none of these labels says what happens if a beneficiary dies before you, or if your children attack the premiums as excessive. The Cour de cassation (France’s supreme court for civil matters) decides cases on precisely these gaps every year, and two recent rulings show what goes wrong and how careful drafting prevents it.
The first trap is the predeceased beneficiary. Article L132-8 of the Code des assurances allows wide designations, covering children born or to be born as well as the heirs or assigns of the policyholder or of a predeceased beneficiary, and it settles two frequent questions in terms worth quoting: “L’assurance faite au profit du conjoint profite à la personne qui a cette qualité au moment de l’exigibilité.” Designating “my spouse” therefore benefits whoever holds that status when the capital falls due, not the person you were married to when you signed. And: “Les héritiers, ainsi désignés, ont droit au bénéfice de l’assurance en proportion de leurs parts héréditaires. Ils conservent ce droit en cas de renonciation à la succession.” Heirs named as beneficiaries keep their insurance rights even if they refuse the succession, which matters when an estate is loaded with debt but the insurance capital is healthy.
On 27 November 2025 the Second Civil Chamber of the Cour de cassation clarified what happens when one of several children named as beneficiaries dies after the policyholder without having accepted. In Cass. 2e civ., 27 November 2025, appeal no. 24-12.679, a grandmother had named her spouse, failing that her children in equal shares, failing that her legal assigns: “Je désigne comme bénéficiaire en cas de décès mon conjoint, à défaut mes enfants par parts égales, à défaut mes ayant-droits légaux”. One of her two children died four days after her without claiming the money, and the courts had to decide whether his son could step into his shoes. The Cour de cassation quashed the appeal ruling and held, word for word: “Il résulte de la combinaison de ces textes que le bénéfice d’une stipulation pour autrui est transmis aux héritiers du bénéficiaire désigné n’ayant pas accepté ce bénéfice lorsque celui-ci vient à décéder après le décès du stipulant, sauf manifestation contraire de volonté de ce dernier.” It added the decisive refinement: “lorsque la clause bénéficiaire prévoit des stipulations pour autrui distinctes, en cas de décès de l’un des bénéficiaires après le décès du stipulant, les droits de ce bénéficiaire décédé sont transmis à ses héritiers, même en l’absence d’acceptation et en présence d’autres bénéficiaires de même rang ou de sous-ordre, sauf manifestation contraire de volonté du stipulant.” Each child named in equal shares therefore holds a distinct personal right that passes to his or her own heirs, unless the policyholder clearly said otherwise. For a British grandmother in France with English grandchildren, the lesson is to write the representation expressly into the clause, for example by writing that the children take in equal shares with the share of any predeceased child passing to his or her own descendants, rather than relying on judges to reconstruct your intention years later.
A. What wording avoids the predecease trap and the excessive-premiums claim?
The second trap is the children’s attack on the premiums themselves. Article L132-13 of the Code des assurances shields the capital from the rules on sharing out and reducing gifts that infringe the children’s reserve, then states the famous exception: “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.” Premiums that were “manifestly excessive” in light of the policyholder’s means can be pulled back into the estate and shared between the reserved heirs. The Paris Court of Appeal restated the test on 2 November 2022 (RG no. 20/13958, Fructi Sélection Vie case) in terms every British policyholder should memorise: excessiveness is assessed at the date of each payment, by reference to the age, income, family and financial situation of the policyholder together with the usefulness of the contract to him or her. Age, income, family and financial situation, and the usefulness of the transaction to the policyholder, all assessed at the date each premium was paid, with quantitative and qualitative criteria applied together. In that case a 68-year-old man with modest income had paid 360,000 euros over four years from property-sale proceeds and inheritances while seriously ill; the first court ordered the whole sum back into the succession, but the Court of Appeal reversed and dismissed the daughters’ claim, refusing to reintegrate the 360,000 euros. The reversal shows that even large late-life payments can survive when the overall means and family context support them, but it also shows that children do sue, that first courts sometimes agree with them, and that the family endures years of litigation before the answer arrives.
For a British reader, the excessive-premiums risk has a specific profile. Retirees who sell an English house, bring several hundred thousand pounds to France, and immediately place the whole proceeds in a single assurance-vie naming only the new spouse look exactly like the cases that attract claims: advanced age, modest pension income, one huge premium, disappointed children from a first marriage. Three precautions reduce the exposure. First, keep the premiums proportionate to your total wealth and keep the paperwork that proves it: bank statements, sale deeds for the English property, and a note of why the contract suited you, such as securing the survivor’s income. Second, fund early and in stages rather than emptying the sale proceeds in one payment at eighty. Third, never use the assurance-vie to disinherit children entirely while leaving them nothing else; a contract that strips the estate bare invites the very reduction action you hoped to avoid, and judges read disinheritance strategies unsympathetically. None of this requires abandoning the spouse: a balanced structure with the spouse as principal beneficiary and the children as second-rank beneficiaries, or a split usufruct and bare ownership clause, protects the survivor while giving the children a visible stake that discourages litigation.
Four drafting rules follow from the case law. Name people by full name, date of birth and share, and update the clause after every divorce, remarriage, birth or death rather than trusting the generic “my spouse”. State expressly what happens on predecease, including representation by descendants, instead of leaving the point to the default rules interpreted in the November 2025 ruling. If you want unequal shares, express them as percentages that add up to one hundred, and say who takes the lapsed share if one beneficiary cannot take. Finally, deposit the clause with the insurer by recorded amendment and keep a copy with your will, because a clause the insurer never received is a clause that does not exist on the day it matters. The official public-service page on life insurance, service-public.fr assurance-vie, summarises the mechanism for the general public, but it cannot replace a clause drafted for your own family tree, especially where English and French branches of the family meet.
B. How do you force payment or contest a tax bill, from Paris to the provinces?
When the policyholder dies, the insurer must find the beneficiaries and pay. The timetable is strict. Article L132-23-1 of the Code des assurances gives the insurer fifteen days after receiving notice of death and learning the beneficiary’s details to request the necessary documents, then provides: “A réception de ces pièces, l’entreprise d’assurance verse, dans un délai qui ne peut excéder un mois, le capital ou la rente garantis au bénéficiaire du contrat d’assurance sur la vie.” Beyond those deadlines the unpaid capital automatically bears interest at twice the statutory rate, rising to three times, so delay is expensive for the insurer. In practice, beneficiaries should send the death certificate and proof of identity by tracked post, list every document enclosed, and set a diary date one month ahead. If the insurer asks twice for the same paper, or invents new requirements each month, that correspondence becomes the evidence for the next steps: a formal demand by recorded letter, a complaint to the insurer’s mediation service and to the sector mediator, and ultimately a claim before the judicial court (tribunal judiciaire) for payment with penalty interest. Where the insurer claims a nearer beneficiary exists, or where two branches of the family each claim the money, filing quickly matters because the first judgment often orders provisional payment.
Tax disputes follow a different track. If the tax office applies article 990 I instead of 757 B, miscalculates the 152,500 euro slices, forgets the spouse exemption, or taxes growth that belongs to the premium regime, the beneficiary files a written claim to the tax department that issued the notice, within the statutory complaint period shown on the assessment, attaching the contract history, proof of each premium date, and the death certificate. A refusal, express or implied after six months, opens the way to the administrative court. Success depends almost entirely on paperwork: insurers’ annual statements showing which premiums were paid before and after seventy, beneficiary attestations of allowances already used on other contracts of the same deceased, and proof of kinship or PACS for the exemption. British beneficiaries living in England should appoint a French correspondence address, because time limits run from notification and English post delays do not suspend them.
For readers based in Paris and Île-de-France, three local points deserve attention. First, successions with an international element are routinely handled by Paris notaires with English-speaking departments, and the insurer’s registered office is often in Paris, which makes the tribunal judiciaire de Paris the natural court for payment claims and the administrative appeal route straightforward. Second, property values in the capital mean the excessive-premiums argument cuts both ways: a 300,000 euro premium looks modest beside a Paris flat worth over a million, which helps defend the contract, but it also means children fight harder because the estate itself is large. Third, practical delays are shorter in Paris than elsewhere simply because the notaire, the insurer and the court sit within a few Metro stops of each other; beneficiaries in the provinces should allow extra weeks for every exchange. Wherever you live, the same European framework underpins your will: article 22 of EU Succession Regulation no. 650/2012 lets a British national habitually resident in France choose English law to govern the succession, and the general tax portal impots.gouv.fr publishes the current forms and contact points for the levy returns. Align the will’s choice of law with the insurance clauses before death, and most fights never start.
Conclusion
The French assurance-vie remains, after Brexit, the most efficient bridge between a British family’s English roots and its French life: civilly outside the succession, fiscally sheltered up to 152,500 euros per beneficiary for premiums paid before seventy, fully exempt for a surviving spouse or PACS partner, and payable directly by the insurer within a month of receiving the papers. Its strength depends on three disciplines that no pre-printed form supplies on its own. Fund the contracts early enough that the premiums never look excessive against your age and means. Name each beneficiary precisely, provide expressly for predecease and representation down to the grandchildren, and keep the clause updated after every family event. And keep the proof: premium dates, allowance attestations, kinship documents and the insurer’s correspondence, so that a refusal to pay or a wrong tax calculation can be challenged with documents rather than memories. Drafted with that care, the contract does what British residents in France most often ask of it: it protects the survivor immediately, moves wealth to the children cheaply, and leaves challengers with no opening.