Assurance Vie Tax Efficient Investing

What is an Assurance Vie?

An Assurance Vie is an insurance agreement in France that incorporates both life insurance coverage and investment components. This agreement empowers policyholders to allocate their premiums towards diverse investment options, including mutual funds, bonds, and stocks, with the goal of augmenting their capital over time. One of the significant advantages of an Assurance Vie is that it receives considerable French IHT benefits and amplified exemptions compared to assets that are not an Assurance Vie.

As a result, potential tax obligations are confined to the growth element, and the initial invested premium element is exempt from taxation. We will always recommend speaking with a professional financial adviser on this matter. For further information, download our Assurance Vie guide.

Assurance Vie - Paris

Assurance Vie offers several key benefits:


British expatriates residing in France can benefit from an Assurance Vie in several ways:

  • Firstly, French IHT has enhanced exemptions, with each beneficiary entitled to a tax-free allowance of €152,500 for premiums invested before the policyholder’s 70th birthday.
  • Additionally, policyholders can enjoy gross roll-up and tax deferral of gains while invested, and withdrawals are subject to the ‘Flat Tax’ regime, which imposes a maximum tax rate of 12.8% on gains plus social taxes, resulting in further tax efficiency.
  • The Assurance Vie also offers flexibility in investment options, allowing policyholders to adjust their investments to suit their financial objectives and changing circumstances.
  • Estate planning is another potential benefit of the Assurance Vie, as it enables the tax-efficient transfer of wealth to beneficiaries.
  • Moreover, as a British expat, the Assurance Vie provides currency protection by enabling investment in euro-denominated assets.

It is essential to note that the tax implications of this contract can be intricate, and it is advisable to consult a financial adviser or tax professional to determine if it suits one’s circumstances.

Can an Assurance Vie guarantee capital?

An Assurance Vie may offer some or all of the capital guaranteed, depending on the type of contract and investment options available. Certain contracts provide a capital guarantee, ensuring the policyholder’s invested capital is safeguarded, even if the underlying investments perform poorly.

However, it is essential to note that a capital guarantee could limit the potential for investment growth. When choosing an Assurance Vie contract, it is advisable to carefully weigh the benefits of guaranteed capital security against the potential for investment growth.

How can I decide which investments to make in my Assurance Vie?

The investment choices available within an Assurance Vie depend on the provider and contract type selected. To determine which investments to make in your Assurance Vie, you should consider the following factors:

    1. FINANCIAL GOALS: Determine your financial goals, risk tolerance, and time horizon to identify the investments that can help you reach your desired outcome.

    2. INVESTMENT OPTIONS: Research and compare the investment options in your Assurance Vie contract to select those that align with your financial goals and risk tolerance.

    3. PERFORMANCE HISTORY: Analyse the past performance of the investment options to assess their potential for growth and risk.

    4. DIVERSIFICATION: To minimise overall portfolio risk, consider diversifying your investments across different asset classes and regions.

    5. TAX IMPLICATIONS: Evaluate the tax implications of different investment options, as some may be subject to higher taxes than others.

Considering these factors, you can make informed decisions on which investments to make within your Assurance Vie.

Assurance Vie guide


For British expatriates in France who hold an Assurance Vie, the tax implications may vary depending on multiple factors, such as the terms of the contract, personal circumstances, and tax laws in both France and the UK.

In general, if you are still considered a UK resident or receive income from your Assurance Vie while living in the UK, UK tax may apply to your investments. However, double taxation can be reduced or eliminated through tax treaties between France and the UK. To ensure your Assurance Vie investments are structured in a tax-efficient manner, it’s recommended to seek advice from a financial adviser or tax professional familiar with both tax systems.

For UK nationals, it’s also essential to choose a portable Assurance Vie policy that can be adapted to comply with UK regulations in case of future relocation to the UK.

Is an Assurance Vie right for you?

Whether an Assurance Vie contract suits you depends on various factors, including investment goals, risk tolerance, and personal circumstances. Here are some factors to consider:

  • INVESTMENT GOALS: If you are looking for a flexible investment vehicle with growth potential, an Assurance Vie contract may be a good option.
  • INVESTMENT OPTIONS: An Assurance Vie contract typically offers various investment options, including conservative options like bonds and aggressive options like equities. Your risk tolerance will play a role in deciding which investment options are appropriate for you.
  • DIVERSIFICATION: An Assurance Vie contract can be a useful tool for estate planning, allowing you to designate the contract’s beneficiaries and determine how the death benefit will be distributed.
  • FINANCIAL CONSIDERATIONS: An Assurance Vie contract usually requires a minimum initial contribution and may have associated fees. Consider whether you have the financial resources to make the required contributions and cover the fees.

What to do

To ensure that your investments are structured in a tax-efficient manner, it is recommended to seek guidance from a financial adviser or tax professional who is knowledgeable about the French tax system and the specific provisions of the Assurance Vie contract. We can help with this!

For further information, download our Assurance Vie Tax guide here.

How can we help you?

If you would like to speak to one of our advisers, please get in touch today.

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