For expatriates living in France, Assurance Vie remains one of the most powerful and versatile investment and estate planning tools available. It’s not just a savings product or an insurance policy — it’s a uniquely French solution that combines investment flexibility with preferential tax and inheritance benefits.
For high-net-worth (HNW) individuals who are, or intend to become, French tax residents, an Assurance Vie can play a key role in preserving wealth, managing cross-border assets, and transferring funds to future generations in a tax-efficient way.
At Blacktower Financial Management, we’ve helped countless expats understand and make the most of Assurance Vie — structuring their policies to support their lifestyle, protect their family, and optimise their long-term financial outcomes.
What Is an Assurance Vie?
In simple terms, an Assurance Vie is a life-insurance-based investment wrapper that allows your money to grow in a tax-advantaged environment while offering estate-planning benefits upon death.
When you open an Assurance Vie, you pay either a lump sum or regular premiums to a French or Luxembourg-based insurance company. Your contributions are then invested across a range of funds that reflect your risk appetite and objectives.
The structure generally includes two key investment types:
| Fund Type | Overview |
| Euro Funds | Low-risk investments (such as government or corporate bonds) offering stable returns and often partial or full capital protection. |
| Unit-Linked Funds | Investments tied to the market, including equities, bonds, or multi-asset funds, offering higher potential growth with greater volatility. |
You or your financial adviser can adjust these allocations over time, helping you align your policy with changing financial goals or market conditions.
Luxembourg-based Assurance Vie contracts are also popular among international investors because they typically offer stronger asset protection rules and the ability to hold multi-currency portfolios — for example, in euros, pounds sterling, or US dollars.
Why Is Assurance Vie So Popular with Expats?
There are several reasons Assurance Vie remains the investment vehicle of choice for expatriates in France — particularly those with significant assets or complex cross-border circumstances.
An Assurance Vie allows you to:
- Combine investment and insurance in one flexible structure
- Benefit from tax-deferred growth on your investments
- Access funds when needed through partial withdrawals
- Transfer wealth efficiently to chosen beneficiaries
- Reduce exposure to French wealth and inheritance tax
- Adapt to changes in residency or income status
It is particularly well-suited to long-term financial planning, retirement preparation, or multi-generational wealth transfer.
However, it’s not a short-term investment. To enjoy the most favourable tax benefits, an Assurance Vie should ideally be held for at least eight years.
How Is Assurance Vie Taxed?
One of the main attractions of Assurance Vie is its tax efficiency.
Tax applies only to the gain element (the profit) of any withdrawal, rather than the full amount withdrawn. The longer you hold the policy, the more favourable the rates become.
| Contract Age | Total Tax Rate | Income Tax Rate | Social Charges |
| Up to 8 years | 30% | 12.8% | 17.2% |
| Over 8 years | 24.7% | 7.5% | 17.2% |
After eight years, you also receive an annual income-tax allowance of €4,600 for individuals or €9,200 for couples, which applies to taxable gains (not social charges).
For French tax residents, social charges of 17.2% are usually applied, although non-residents are typically exempt.
If your total premiums paid after 27 September 2017 exceed €150,000 per person (€300,000 for couples), the higher 12.8% rate of income tax continues to apply to all future gains, even after eight years.
Your overall position will also depend on any double taxation treaties between France and your country of origin. For this reason, professional cross-border advice is essential when structuring withdrawals or planning your tax residency.
The Key Tax Advantages to an Assurance Vie
The tax and estate planning benefits of Assurance Vie are what make it so powerful for expats:
1. Tax-Deferred Growth
Your investments can grow within the policy without being taxed annually. You only pay tax when you make a withdrawal, allowing compound growth to work in your favour over time.
2. Tax-Free Fund Switching
You can rebalance your portfolio or switch between funds without triggering a taxable event. This flexibility allows you to adapt your investment strategy without eroding returns through unnecessary taxation.
3. Potential Wealth Tax Benefits
The non-property portion of an Assurance Vie is usually excluded from France’s real-estate wealth tax (Impôt sur la Fortune Immobilière, or IFI). Only the real-estate element within your policy (for example, a property fund) would count towards IFI if your total global real-estate assets exceed €1.3 million.
4. Inheritance Tax Efficiency
Perhaps the most compelling advantage is the inheritance-tax treatment. Funds within an Assurance Vie are typically excluded from your French estate and pass directly to named beneficiaries.
If you took out your policy before age 70, each beneficiary can receive €152,500 tax-free. Amounts above this threshold are taxed at 20%, rising to 31.25% on sums exceeding €700,000.
If the policy is funded after age 70, the first €30,500 of premiums paid is exempt from tax, and the investment growth on those premiums remains tax-free.
Crucially, the death benefit paid to a spouse or civil partner (PACS) is fully exempt from inheritance tax.
This makes Assurance Vie particularly valuable in situations involving blended families, unmarried partners, or international heirs — where French “forced heirship” laws might otherwise restrict how your estate is distributed.
Who Is It Suitable For?
While Assurance Vie is available to a broad range of investors, but they are typically used by high-net-worth expatriates who:
- Plan to live or retire in France
- Have significant capital to invest (typically €100,000 or more)
- Wish to combine investment growth with estate-planning benefits
- Seek tax-efficient wealth transfer to chosen beneficiaries
- Want flexibility to access or restructure their investments
For expats moving to France, or those already resident, Assurance Vie can serve as the cornerstone of a broader cross-border wealth management strategy — helping integrate investments, pensions, and estate plans under one tax-efficient structure.
How We Can Help
Navigating the French tax system and cross-border financial rules can be challenging. Assurance Vie may offer powerful advantages, but its benefits depend heavily on how the policy is structured and managed.
At Blacktower Financial Management, we specialise in helping British and international expatriates design investment and estate-planning strategies that make the most of local and international regulations.
Our advisers work with leading French and Luxembourg insurance providers to create bespoke Assurance Vie portfolios tailored to your goals, residency status, and long-term financial ambitions.
Whether you are already living in France or considering relocation, our team can:
- Help you determine whether Assurance Vie suits your financial objectives
- Structure your policy for maximum efficiency and flexibility
- Ensure compliance with both French and international tax regulations. We work closely with tax professionals and can introduce you to the right expert.
- Integrate your Assurance Vie into your broader estate-planning strategy
Start Planning with Confidence
Managing wealth as an expatriate in France offers unique opportunities — but also complex challenges. With the right strategy, Assurance Vie can help you grow, protect, and pass on your wealth efficiently, while enjoying the peace of mind that comes with a well-structured estate plan.
To find out more, you can speak to one of our experienced advisers at Blacktower Financial Management. We’ll help you understand your options, how an Assurance Vie might fit within your overall financial planning.and build a personalised plan for your financial future in France.
This communication is for informational purposes only based on our understanding of current legislation and practices which are subject to change and are not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. Investing involves risk. The value of investments can go down as well as up, and you may not get back the amount originally invested. Past performance is not a reliable indicator of future results. You should seek independent advice from a qualified tax professional regarding your personal circumstances before taking any action. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
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