You live in France, you hold a British passport, and a French bank or adviser has suggested an assurance-vie, which is the French life-insurance savings contract that millions of residents use to organise what happens to their money when they die. The promise sounds almost too good: the capital passes directly to the people you name, outside the succession, which is the French legal process that transfers a deceased person’s estate, and outside the forced heirship shares that French law reserves for children. The promise is real, but it is fenced in by two age thresholds, two allowances, a levy that climbs from 20% to 31.25%, a beneficiary clause that courts read literally, and children who can challenge premiums they consider excessive. This guide explains, in plain English and with the exact legal texts, how the money moves, what it costs in each age bracket, how to word the clause so the right person is paid, and what to do when the insurer stalls or the family objects.

I. How French law lets your assurance-vie pass outside the succession, and taxes it on a track of its own

The starting point is a single sentence of the Insurance Code that makes the whole product possible. Article L132-12 of that Code (Insurance Code, art. L132-12) provides: “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.” In other words, the lump sum or annuity payable on the death of the assuré, the person whose death triggers payment, to a named beneficiary or to the heirs, never enters the estate of that person. The beneficiary is deemed to have owned the right from the day the contract was signed, even if acceptance came after death. For a British family in France, the practical meaning is considerable: money placed in the contract does not swell the estate that must be divided between protected children, and it is not distributed under the intestacy rules or under a will that the children could otherwise attack through the réserve héréditaire, the forced share French law guarantees to children. That advantage explains why the assurance-vie sits at the centre of almost every estate plan drawn up for British residents, whether the goal is to protect a spouse, to favour one child, to provide for an unmarried partner who would otherwise face the 60% rate for strangers, or to pass a precise sum to grandchildren. But the advantage is not a tax exemption. The same legislature that kept the capital out of the succession built a separate tax system for it, and that system turns entirely on one question: how old were you when you paid the premiums in? Premiums paid before the seventieth birthday fall under article 990 I of the General Tax Code, with a generous per-beneficiary allowance and a flat levy. Premiums paid after that birthday fall under article 757 B, with one small shared allowance and ordinary death duties by family link. Confusing the two brackets is the most expensive mistake a British policyholder, known as the souscripteur, can make, because money paid at 71 is treated nothing like money paid at 69.

A. Premiums paid before your seventieth birthday: 152,500 euros per beneficiary, then a levy of 20% and 31.25%

Article 990 I of the General Tax Code (CGI, art. 990 I) sets the rule for everything outside article 757 B, which in practice means every premium paid before the policyholder’s seventieth birthday. The mechanism has three steps, and each step must be understood separately because advisers sometimes present only the allowance and skip the levy. First, from each beneficiary’s share, the insurer deducts a fixed allowance, known as an abattement, of 152,500 euros. This allowance is personal to each beneficiary: if you name three children, each of them enjoys the full 152,500 euros on what they receive, and the allowances do not eat into one another. Second, on the remaining taxable fraction of each beneficiary’s share, a prélèvement, a flat levy collected at source by the insurer, applies at 20% on the fraction at or below 700,000 euros and at 31.25% on whatever exceeds that line. The Code states the arithmetic directly: “puis d’un abattement fixe de 152 500 €. 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.” A concrete example makes the numbers tangible. Suppose a British resident of Lyon paid 400,000 euros into the contract at 62 and names her daughter as sole beneficiary. The daughter deducts 152,500 euros, leaving 247,500 euros taxable, and the levy at 20% takes 49,500 euros, so she receives 350,500 euros net of that levy. Had the capital been 1,100,000 euros, the same daughter would deduct 152,500 euros, pay 20% on the first 700,000 euros of the taxable share and 31.25% on the rest. Third, the surviving spouse and the partner bound to the deceased by a PACS, the French civil partnership registered at the mairie or the tribunal, pay nothing at all: the Code shelters any beneficiary who is already exempt from death duties, and article 796-0 bis of the same Code (CGI, art. 796-0 bis) 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.” For a married British couple in France, this is the single most valuable line in the system: everything left to the husband or wife through the assurance-vie escapes both the levy and the duties, whatever the amount. Two administrative details complete the picture and both cause preventable disputes. Every beneficiary must give the insurer an attestation sur l’honneur, a signed statement on honour, declaring the allowances already used on sums received from any insurer on the death of the same policyholder, because the 152,500 euros is per beneficiary per deceased across all contracts, not per contract. And the levy is collected by the organisme d’assurance, the insurer or equivalent body, before payment, so the beneficiary never has to compute it alone but must check that the insurer applied the right bracket, especially where several contracts on the same life are involved. Where the insurer applies the levy to money that should have been exempt, for example to a spouse, or forgets an allowance already declared, the remedy starts with a written complaint to the insurer with the death certificate, the contract references and the attestation, and continues, if the answer is unsatisfactory, through the insurance mediator and then the courts, as explained in Part II.

B. Premiums paid after your seventieth birthday: one shared allowance of 30,500 euros, then ordinary death duties by family link

The second bracket surprises almost every British policyholder who keeps paying into a contract late in life. Article 757 B of the General Tax Code (CGI, art. 757 B) provides that sums due by an insurer on death “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 fraction of premiums paid after seventy returns to ordinary death duties, calculated according to the family link between the beneficiary and the deceased, exactly as if the money had passed through the succession. All premiums paid before seventy stay under the 990 I system described above, so a contract fed at 65 and topped up at 75 produces two tax parcels with two different treatments, and the insurer must separate them. The allowance in this bracket is far smaller and, crucially, shared: “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 €.” One global allowance of 30,500 euros covers all contracts on the same life together, however many beneficiaries divide it. Above that line, the ordinary tariff applies, which means 5% to 45% for children after their own personal allowance, 55% between brothers and sisters in the top slice, and 60% for non-relatives after a token allowance. The contrast with the under-seventy bracket is stark for the typical British concern, the unmarried partner: 400,000 euros paid at 68 and left to a cohabiting partner costs the levy on 247,500 euros, while the same 400,000 euros paid at 72 and left to the same partner suffers death duties at 60% on nearly the whole sum. Three further points matter specifically for Britons. First, residence decides the perimeter: article 750 ter of the General Tax Code (CGI, art. 750 ter) provides that “Sont soumis aux droits de mutation à titre gratuit : 1° Les biens meubles et immeubles situés en France ou hors de France,” including investments of every kind, “lorsque le donateur ou le défunt a son domicile fiscal en France” within the meaning of article 4 B. A British person fiscally domiciled in France is therefore caught on worldwide assets, and a British investment bond kept in London does not escape French death duties merely because the account sits abroad. Second, where the beneficiary lives outside France, the insurer will not release the funds until the French tax position is settled, and the impots.gouv.fr guidance for beneficiaries confirms that a form 2705-A must be filed with payment to obtain the certificate of payment or non-liability from the Recette des Non-Résidents at Noisy-le-Grand before the insurer releases the money. British children who stayed in the United Kingdom should expect this step and prepare the death certificate, proof of identity and bank details early. Third, on the British side of the Channel, HM Revenue and Customs may still be interested: the GOV.UK overview reminds readers that Inheritance Tax is a tax on the estate of someone who has died and maintains dedicated rules for deaths of people based outside the United Kingdom, so a British beneficiary should take independent UK advice rather than assume the French treatment settles everything. The double protection is therefore to stop and check before paying premiums after seventy, to measure the 30,500 euros against the real family links of the intended beneficiaries, and to keep the pre-seventy and post-seventy parcels documented separately so the insurer taxes each correctly.

II. Naming the right beneficiary, and forcing payment when the file stalls

Getting the tax bracket right is only half the work. The other half is the clause bénéficiaire, the beneficiary clause, which is the paragraph of the contract, or a separate letter kept with it, that says who receives the capital. French courts read this clause with unusual strictness, because the insurer is a third party that must pay the right person and cannot guess. A clause that names “my spouse”, “my children” or “my heirs” will be applied to whoever holds that status on the day the capital falls due, not on the day the contract was signed, which means a divorce, a remarriage, a birth or a death between signature and payment can redirect hundreds of thousands of euros without the policyholder ever touching the file. British residents face an additional trap: the English will, carefully drafted in London, does not rewrite the French beneficiary clause, and a French notaire settling the succession cannot redirect assurance-vie capital to different people. The clause, and only the clause, decides. Where the clause is vague, the insurer may freeze payment and wait for the family to agree or for a court to interpret it, which is how files stall for months. Where protected children believe the contract was used to empty the estate at their expense, they can sue to bring excessive premiums back into the succession. Both risks are managed the same way: precise drafting while alive, and rapid, documented action after death. The two sections below give the drafting rules first, then the remedies when payment is refused, delayed or challenged.

A. Write the beneficiary clause as if a stranger will have to apply it years later

Article L132-8 of the Insurance Code (Insurance Code, art. L132-8) defines who counts as a properly identified beneficiary, and its wording rewards precision. The capital may be payable “à un ou plusieurs bénéficiaires déterminés”, to one or more specified beneficiaries, and the Code accepts a designation of people who are not named individually provided they are “suffisamment définies dans cette stipulation pour pouvoir être identifiées au moment de l’exigibilité du capital ou de la rente garantis”, sufficiently defined in the clause to be identifiable when the capital falls due. The text then lists designations that automatically satisfy the test: “les enfants nés ou à naître du contractant”, children born or to be born, and “les héritiers ou ayants droit de l’assuré”, the heirs or successors of the policyholder. Two sentences of the same article deserve attention from every British reader. First, “L’assurance faite au profit du conjoint profite à la personne qui a cette qualité au moment de l’exigibilité”, insurance taken out for the spouse benefits whoever holds that status when the money falls due, so a clause naming “my spouse” signed during a first marriage pays the second spouse if the clause was never updated. Second, “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 in this way share in proportion to their inheritance shares and keep the right even if they renounce the succession, which means the capital can flow to someone who refused the rest of the estate. The Cour de cassation, France’s supreme court for civil matters, confirmed how literally these clauses are read in a widely discussed ruling of 30 September 2020, appeal number 19-11.187 (Cass. 1st civ., 30 Sept. 2020, No. 19-11.187), published in its Bulletin. The policyholder’s clause gave the benefit to “mes héritiers”, my heirs, and one son argued that only the two legal heirs should share, excluding a granddaughter who held a universal legacy under the grandmother’s will. The Court recalled that “Est considérée comme faite au profit de bénéficiaires déterminés la désignation comme bénéficiaires des héritiers ou ayants droit de l’assuré”, then held that “il appartient aux juges du fond d’interpréter souverainement la volonté du souscripteur, en prenant en considération, le cas échéant, son testament”, it is for the trial judges to interpret the policyholder’s intention as they see fit, taking the will into account where relevant, and it rejected the appeal, letting the capital be shared between the legal heirs and the universal legatees named in the will. The lesson for a British family is direct: never write “my heirs” if you mean two named children in unequal shares, and never assume the French reader of your clause knows what your English will intended. The practical drafting checklist used by French practitioners has five lines. Name each beneficiary with full maiden and married names, date and place of birth, so the insurer can identify them without debate. State the shares as percentages that add to one hundred. Add a fallback rank, for example the beneficiary’s own children if the beneficiary dies first, because without one the share usually accrues to the surviving named beneficiaries or falls back to the estate. Date and sign every amendment, and send it by registered letter or through the insurer’s online process so receipt is provable, keeping a copy with the will. Review the clause after every family event, divorce, remarriage, birth, death, and after every move between France and the United Kingdom, because residence changes the tax but never rewrites the names. For British readers with beneficiaries in the United Kingdom, add two refinements: give the insurer the beneficiary’s current address and bank details in advance, since cross-border identification checks slow payment, and warn the beneficiary that the insurer will ask for the French tax clearance, the 2705-A certificate described above, before releasing funds to an account abroad. Finally, keep the related article on choosing English law for the French house and the guide to the succession declaration side by side with this one: the will organises the estate, the beneficiary clause organises the assurance-vie, and the two documents must tell the same story. Readers settling a death right now should also consult the step-by-step account of the heir’s declaration, deadlines and tax, which explains how the notaire, the public legal officer who settles French successions, articulates the succession file with the separate insurance payments. Those internal guides are here: British will and French house: choosing English law and British heir: declaration, deadlines and tax after a death in France.

B. When protected children attack the policy, or the insurer will not pay

Two different blockages bring British families to a lawyer’s door, and they require opposite reflexes. The first blockage comes from inside the family: children who discover that large premiums were paid late in life to benefit someone else, a new spouse, a partner, a friend, a charity, and who ask the court to bring the money back so their forced shares are computed on the full estate. The weapon is article L132-13 of the Insurance Code (Insurance Code, art. L132-13), which otherwise protects the contract completely: “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.” Neither the duty to return gifts to the estate, known as rapport, nor the reduction of gifts that infringe the children’s forced shares applies to the capital. Then comes the exception, the only door the children can use: “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”, the premiums themselves escape too, unless they were manifestly excessive in light of the policyholder’s means. The Cour de cassation sharpened this test on 19 December 2024, appeal number 23-19.110 (Cass. 2nd civ., 19 Dec. 2024, No. 23-19.110), a cassation ruling published in its Bulletin that quashed a decision of the Metz Court of Appeal of 23 May 2023. An elderly policyholder had placed 130,000 euros, more than three quarters of her assets, into a contract benefiting a cancer charity, and the appeal court had ordered the premium reduced and returned to the estate. The supreme court recalled the governing principle word for word, “les règles du rapport à succession et celles de la réduction pour atteinte à la réserve des héritiers ne s’appliquent pas 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”, and added the decisive measurement rule: “un tel caractère s’apprécie au moment du versement, au regard de l’âge, des situations patrimoniale et familiale du souscripteur et de l’utilité du contrat pour ce dernier”, excessiveness is judged at the moment of payment, looking at the age, the wealth and family situation of the policyholder and the usefulness of the contract to them. Because the appeal judges had relied on the bare proportion of wealth placed on the contract, without weighing whether the payment had strained her standard of living or whether the contract served her, the ruling was quashed and the case sent to Nancy. For British policyholders the guidance is concrete. Paying large premiums at an advanced age while leaving modest other assets invites challenge, especially where children receive little elsewhere. Paying steadily over the years, keeping the contract useful as savings, and documenting means and motives at the time of each payment builds the defence the 2024 ruling describes. Children considering a challenge should know the mirror image: the court will not reduce a premium merely because it is large, and a policyholder whose lifestyle was unaffected and whose contract served a genuine savings purpose is hard to defeat. The second blockage comes from the insurer: months pass, documents are requested twice, payment never arrives. Here the policyholder’s family holds a powerful and little-known text, article L132-23-1 of the Insurance Code (Insurance Code, art. L132-23-1). The insurer has fifteen days from learning of the death and the beneficiary’s details to ask for all the documents it needs, and duplicate or redundant requests are forbidden. Then, “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.” Once the file is complete, payment must follow within one month. Late payment automatically bears interest at multiples of the taux légal, the statutory interest rate set by the State: “Au-delà du délai prévu au deuxième alinéa, le capital non versé produit de plein droit intérêt au double du taux légal durant deux mois puis, à l’expiration de ce délai de deux mois, au triple du taux légal.” The beneficiary’s action plan therefore runs in four documented steps. First, send the complete file by registered letter with acknowledgement of receipt: death certificate, proof of identity, proof of beneficiary status, bank details, and the tax clearance or 2705-A certificate where required, and keep copies of everything. Second, if the insurer asks twice for the same paper or invents new requirements, answer in writing citing the fifteen-day and one-month time limits, which usually unblocks the file. Third, if payment still does not come, refer the dispute to the Médiation de l’Assurance, the independent insurance mediator whose details appear on the service-public.fr pages describing assurance-vie contracts, while preserving all limitation periods. Fourth, bring the claim before the tribunal judiciaire, the general civil court, asking for the capital plus the statutory multiplied interest, and for the levy computation to be corrected where the insurer taxed an exempt spouse or forgot an allowance. Every step must be written, dated and kept, because the interest penalties and the mediator both turn on proof of when the insurer received what.

Conclusion

The assurance-vie remains the most effective lawful tool a British resident in France can use to move money outside the succession, but only when each of its three locks is opened with the right key. The tax lock turns on age: premiums paid before seventy enjoy 152,500 euros per beneficiary and a levy of 20% then 31.25%, while premiums paid after seventy share a single 30,500 euros and suffer ordinary death duties, with worldwide assets caught once France is the fiscal domicile and non-resident beneficiaries routed through the 2705-A clearance. The designation lock turns on words: a clause naming precise people with exact shares survives, while “my heirs” or “my spouse” invites the interpretation disputes the supreme court had to settle in 2020. The challenge lock turns on proof: premiums judged excessive only by reference to age, means, family situation and usefulness at the moment of payment, and insurers held to fifteen days to ask and one month to pay, with multiplied statutory interest for delay. Check the clause, separate the pre-seventy and post-seventy parcels, declare the allowances honestly, and answer every insurer request in writing. The file that respects that order is the file that pays.

Need a quick opinion on your case.

Telephone consultation: 80 EUR TTC with an avocat of the firm within 48 hours. Call +33 6 46 60 58 22 or write via the contact page. Bring your assurance-vie contracts, the beneficiary clauses with their amendments, proof of when each premium was paid, and any letter from the insurer or the notaire so the advice starts from your papers, not from generalities.

Legal sources: Insurance Code, art. L132-8; Insurance Code, art. L132-12; Insurance Code, art. L132-13; Insurance Code, art. L132-23-1; CGI, art. 990 I; CGI, art. 757 B; CGI, art. 750 ter; CGI, art. 796-0 bis; Cass. 2nd civ., 19 Dec. 2024, No. 23-19.110; Cass. 1st civ., 30 Sept. 2020, No. 19-11.187; impots.gouv.fr – beneficiary of an assurance-vie; GOV.UK – dying while based outside the UK.