7 Reasons to consider Assurance Vie if you're a British Expat living in France

7 Reasons why you should consider Assurance Vie

1. Tax-free Growth

Investments inside an Assurance Vie grow free from annual income tax or capital gains tax. This “gross roll-up” effect means your capital compounds faster, without being eroded each year by taxation. Tax only becomes due when you withdraw funds. Social contributions on euro-fund interest are deducted annually, but income tax only applies when you withdraw.

2. Tax-efficient Withdrawals

When you take money out of an Assurance Vie, withdrawals are treated as a mix of capital and gain in proportion to your policy’s performance. You are only taxed on the gain element, not on your original investment.

This proportional method prevents you from being penalised for simply accessing your own money. It makes withdrawals more efficient than with many other investment vehicles.

3. Tax Savings After 8 Years

After holding your Assurance Vie for eight years, the tax treatment becomes even more favourable:

• Annual allowances on gains: €4,600 for individuals or €9,200 for couples.

• Gains above these allowances can be taxed at taxed at 7.5% (on gains linked to up to €150,000 of premiums per person), or 12.8% above that, plus social charges.

This makes Assurance Vie especially valuable as a long-term savings and retirement tool. The longer you hold the policy, the greater the benefits.

4. Multi-Currency Flexibility

Unlike many French domestic savings products, expat-friendly Assurance Vie contracts can be denominated in euros, sterling, dollars, or Swiss francs. This flexibility helps you manage exchange-rate risk. It is particularly useful for British expats whose financial lives span both the UK and the eurozone.

5. Inheritance Advantages

Assurance Vie is one of the most powerful estate planning tools available in France because it sits outside the standard French succession rules. You can nominate your beneficiaries directly, and the policy is not automatically bound by the strict French “forced heirship” regime.

Here is how the inheritance benefits work:

• Before age 70: Contributions benefit from a €152,500 tax-free allowance per beneficiary. Above this, amounts are taxed at 20% up to €700,000, and 31.25% beyond that.

• After age 70: A smaller €30,500 total exemption applies across all beneficiaries. Importantly, any investment growth within the policy remains exempt.

• Spouses and PACS partners: Always exempt from inheritance tax.

• Non-relatives: For premiums paid before age 70, they also benefit from the €152,500 allowance and 20%/31.25% band. The €1,594 + 60% regime applies mainly to post-70 premiums or outside assurance-vie.

6. Flexible Investment Options

Assurance Vie allows you to choose from a broad range of investments, typically including:

• Fonds en euros (capital-protected but lower-yielding funds).

• Unit-linked funds (riskier but with greater growth potential).

This flexibility lets you adapt your portfolio to your risk profile, time horizon, and evolving needs as an expat.

7. Unlimited Investment Amounts

Unlike UK ISAs or pensions, there is no upper cap on contributions to an Assurance Vie.

Is it the right solution for you?

For British expats in France, Assurance Vie remains one of the most effective ways to combine tax efficiency, investment flexibility, and estate planning benefits. Its advantages grow stronger over time, making it an excellent structure for long-term planning.

That said, the rules can be nuanced, particularly when factoring in age, beneficiary type, and cross-border tax considerations. It is important to review your arrangements regularly and seek professional advice tailored to your circumstances.

Our dual-qualified advisers can help you explore the full range of investment and estate planning opportunities available as an expat in France. We make the complex simple and clearly explain how each option, including Assurance Vie, could benefit you and your family.