# Assurance vie question



## Keri22

In France the gain from an AV will, when sums are withdrawn, be subject to both capital gains tax and social charges. If other income is not subject to income tax because it is too low, then the tax on the capital gain of the AV withdrawal will be remitted. But the social charges will still be imposed at 17.5%.

Is this correct?


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## Bevdeforges

As with all things, "it depends." The deal with assurance vie, you're correct in that you only are taxed on the gains over and above your initial investment. So, if you invest 100,000 € and when you take your first withdrawal, the total in the assurance vie contract is 150,000 € then for whatever amount you take out, you'll only be taxed on one-third (which is the proportion attributed to the "gains"). When you take a withdrawal from the funds, there is a flat rate of tax, plus you pay the social charges. (Or you can elect to be taxed at the bareme if that is more advantageous to you.) The tax rate is reduced if you have held the contract for at least 8 years before this withdrawal. And there is some further reduction of the flat tax rate available if you established the fund before the age of 70 (and the total amount you put into the fund is 150,000€ or less). I seem to remember that there is also a reduction in the social charges if you set up the fund before you hit age 70 and have held it for the full 8 years or more. 

But of course in the typical French manner, the exact rates and terms vary a bit depending on when you set up the assurance vie contract, and if you are withdrawing the funds for certain types of life events (like retirement, to buy a house, stuff like that). The Fisc website has information on this here: L'assurance-vie et le PEA


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