You have held a French life-insurance savings contract (assurance-vie) for a few years, and you are about to withdraw part of your savings. Home renovations, a down payment on a purchase, a helping hand for a child: whatever the reason, one question always comes up. How much will the tax authorities take? Between the French flat tax on investment income (PFU), the French tax allowance (abattement) after eight years, the €150,000 threshold and the French social charges on investment income (prélèvements sociaux), the taxation of assurance-vie has a reputation for being a headache. It is, a little. But once you understand the logic, the calculation becomes almost simple. Here we explain what you actually pay on a withdrawal in 2026, with worked examples to back it up.
How Is an Assurance-Vie Withdrawal Taxed in France?
This article was originally written in French by Jordan Houi for readers residing in France. The savings products, tax rules, and figures it describes apply in France; other countries have different rules.
In this article:
On withdrawal, only the gains are taxed
Income tax and social charges: the two layers of the bill
Withdrawal before 8 years
Withdrawal after 8 years
Three withdrawals calculated from start to finish
How to pay less tax on your withdrawals
And upon death?
Assurance-vie and crowdlending: comparing on an equal tax footing
FAQ
Taxation at the time of withdrawal
Let's start with the most important principle, and the one most often misunderstood.
When you take money out of your contract (this is called a withdrawal, or rachat), you do not pay tax on the entire amount withdrawn. The money you paid in yourself is never taxed: it is your capital, and it was already taxed before it went into the contract.
Only the portion of gains contained in the withdrawal is taxed.
The catch is that you do not get to choose to withdraw "the gains first" or "the capital first." Every withdrawal contains a mix of both, in the same proportion as across the contract as a whole. The formula is as follows:
Taxable gains = withdrawal amount × (contract value − payments) ÷ contract value
An example? You have paid in €40,000 and your contract is now worth €50,000. Your gains therefore amount to €10,000, or 20% of the contract. If you withdraw €5,000, only €1,000 (20% of the withdrawal) is taxable.
The remaining €4,000 comes back to you completely tax-free.
If your contract is showing a loss, meaning it is worth less than what you paid in, a withdrawal triggers no tax and no social charges at all.
Income tax and social charges: the two layers of the bill
Two levies add up on the gains portion.
On one side, income tax, whose rate depends on how long you have held the contract and how much you have paid in. We cover this in the next two sections.
On the other, social charges (CSG, the French general social contribution, plus CRDS and the solidarity levy), due no matter what at a rate of 17.2%, with no allowance available.
And in 2026, this 17.2% rate takes on special significance. The CSG increase passed for this year raised social charges to 18.6% on most investment income: French standard taxable brokerage account (compte-titres), French tax-advantaged stock savings plan (PEA), interest on loans... But assurance-vie was explicitly excluded from this increase. The result? The PFU stays at 30% on an assurance-vie, versus 31.4% for most other investments.
A discreet advantage, but a very real one.
Euro fund or unit-linked funds: when social charges are taken
Here is the point that surprises savers most when they make a withdrawal.
On the capital-guaranteed euro fund within a French life-insurance contract (fonds en euros), social charges are not deducted at withdrawal. They are withheld every year, directly from the interest credited to the contract. So when you withdraw, they have already been paid, at least for the most part.
On market-linked investment units within a French life-insurance contract (unités de compte), it is the opposite: nothing is withheld as long as you leave the money alone. The social charges are due at the time of the withdrawal, on the gains portion.
In practice, most contracts are mixed. The insurer runs the numbers at the time of the withdrawal and takes into account what has already been withheld in previous years.
Withdrawals before 8 years
Before the contract's eighth anniversary, the tax treatment is at its simplest, and least favorable.
By default, the gains portion is subject to the single flat-rate levy (PFU, also called the flat tax): 12.8% income tax, plus 17.2% social charges. That is 30% in total.
You can also opt for the progressive income tax scalewhen you file your annual return. This option only makes sense if your marginal tax rate is below 12.8%, in practice if your household is not taxable or falls in the 11% bracket. Be careful: opting for the scale then applies to all your investment income for the year, not just this withdrawal.
These rules apply to payments made since September 27, 2017. Sums paid in before that date fall under the old regime, with final withholding tax rates of 35% before 4 years and 15% between 4 and 8 years. Your insurer does the allocation itself.
Withdrawals after 8 years
After eight years, assurance-vie becomes genuinely attractive.
Each year, your gains benefit from an allowance of €4,600 if you are single, or of 9 200 € for a married couple or a couple in a French civil partnership (PACS) filing jointly. This allowance covers all your withdrawals for the year, across all contracts.
Beyond the allowance, the remaining gains portion is taxed at a reduced rate of 7.5%, plus social charges. That is 24.7% in total.
But be careful: two subtleties often change the picture.
The first: the allowance applies only to income tax. Social charges remain due on all of the gains, from the very first euro. So even a withdrawal fully covered by the allowance costs 17.2% in social charges on its share of gains (except on the euro fund, where they have already been paid).
The second: at the time of the withdrawal, the insurer generally withholds 7.5% on the gains, without taking the allowance into account. This is only a prepayment. The allowance is applied the following year, when your tax is calculated, and any overpayment is refunded to you.
So don't panic if you see a deduction when you thought you would pay nothing!
The €150,000 contribution threshold
The 7.5% rate does not apply without limit. It covers the gains attributable to the first €150,000 of contributions, across all assurance-vie contracts combined. Above that, the corresponding share of gains is taxed at 12.8%, just as before eight years.
Important point: the threshold is assessed on the contributions still invested, not on the value of your contracts. A saver who has contributed €120,000 and whose contract is worth €200,000 today remains entirely below the threshold.
When the threshold is exceeded, the taxable share of gains (after the allowance) is split pro rata. If you have contributed €250,000, 60% of that share (150,000 ÷ 250,000) is taxed at 7.5% and 40% at 12.8%.
Three withdrawals, calculated from start to finish
Enough rules; let's get to the numbers. In the three cases below, the contract is invested in unit-linked funds, so that the social charges show up at the time of the withdrawal.
Case no. 1: a 5-year-old contract. Claire contributed €40,000 to a contract opened five years ago, which is worth €46,000 today. She withdraws €10,000.
The share of gains in the withdrawal is €1,304 (10,000 × 6,000 ÷ 46,000). She pays €167 in income tax (12.8%) and €224 in social charges (17.2%).
Total: €391, or less than 4% of her withdrawal.
Case no. 2: a 10-year-old contract, within the allowance. Marc, who is single, contributed €50,000 to a ten-year-old contract, which is worth €70,000. He withdraws €14,000.
The share of gains is €4,000, below the €4,600 allowance. So he owes no income tax. The insurer still withholds €300 (7.5%) at the time of the withdrawal, which will be refunded to him the following year. That leaves the social charges: €688.
Case no. 3: a large 12-year-old contract, above €150,000. Sophie, who is single, has paid in a total of €250,000. Her contract is worth €350,000. She withdraws €70,000.
The gains portion is €20,000. After the €4,600 allowance, €15,400 remains taxable. On a pro rata basis, €9,240 is taxed at 7.5% (€693) and €6,160 at 12.8% (€788). Social charges come to €3,440.
Total: €4,921, or about 7% of the amount withdrawn.
| Case no. 1 | Case no. 2 | Case no. 3 | |
|---|---|---|---|
| Contract age | 5 years | 10 years | 12 years |
| Withdrawal amount | 10 000 € | 14 000 € | 70 000 € |
| Gains portion | 1 304 € | 4 000 € | 20 000 € |
| Income tax | 167 € | 0 € | 1 481 € |
| Social charges | 224 € | 688 € | 3 440 € |
| Total cost | 391 € | 688 € | 4 921 € |
As you can see, even in the least favorable case, the bill remains modest relative to the amount withdrawn. Why? Because a large part of each withdrawal is simply your own capital coming back to you..
How can you pay less tax on your withdrawals?
Good news: a few simple habits can lighten the bill, with no complicated arrangements.
Spread out your withdrawals. The €4,600 or €9,200 allowance renews every year. Rather than one large withdrawal, several withdrawals spread over several years let you use it each time. If your plans allow it, this is often the most effective lever.
Favor partial withdrawals. A full withdrawal closes the contract and makes you lose its tax seniority. A partial withdrawal keeps the contract open, along with its eight years of age.
Open a contract early, even with a small amount. The eight-year clock starts when the contract is opened, not with each deposit. Opening a contract with a small sum means staking your claim for the future.
Check the option for the progressive brackets. If your income is low in a given year, taxation under the progressive income tax brackets can be gentler than the flat rate. Run the numbers for both before you file.
Some savers practice a gains "purge": a withdrawal each year just under the allowance, immediately reinvested. The technique reduces future income tax, but social charges are still due on each transaction, and deposit fees may apply. Calculate it case by case.
What happens upon death?
A withdrawal is not the only way out of a contract. When the insured person dies, the funds are paid to the designated beneficiaries, under completely different tax rules.
For deposits made before the insured person turns 70, each beneficiary receives a €152,500 allowance. For those made after 70, an overall allowance of €30,500 applies, and the gains are exempt. Spouses and PACS partners pay nothing at all.
This is what makes the assurance-vie such a popular estate-planning tool.
Assurance-vie and crowdlending: comparing on equal tax terms
When you compare the assurance-vie to other investments, taxation often skews the comparison if you don't look at it closely.
Take €1,000 of income. On an assurance-vie held for more than eight years, under the allowance, you pay only the social charges: €172. For €1,000 of interest earned through crowdlending, the PFU applies, with social charges raised to 18.6% in 2026: €314 in total, and from the very first year.
So the assurance-vie wins the tax battle over time. But taxation is only one criterion among others. Gross return, risk, regularity of income and liquidity matter just as much. Crowdlending pays interest throughout the life of the loan and doesn't require you to wait eight years, while the euro fund shows more modest returns and unit-linked funds guarantee nothing.
The two are not necessarily at odds: they can complement each other in a diversified portfolio. We detail how interest is taxed in our guide on taxation of crowdlending.
Summary table
| Situation | Income tax (on gains) | Social charges |
|---|---|---|
| Withdrawal before 8 years | 12.8% (or progressive brackets by election) | 17,2 % |
| Withdrawal after 8 years, within the allowance | 0 € | 17,2 % |
| After 8 years, above the allowance, contributions up to €150,000 | 7,5 % | 17,2 % |
| After 8 years, share of contributions above €150,000 | 12,8 % | 17,2 % |
| Contract at a loss | 0 € | 0 € |
Key takeaways
On a withdrawal, only the gains portion is taxed, never your capital. That is why the actual tax bill is almost always much lower than people imagine.
After eight years, the annual allowance of €4,600 or €9,200 wipes out income tax on most reasonable withdrawals. What remains are the social charges, which were spared from the 2026 CSG increase and therefore remain at 17.2%.
Finally, your best tax ally is time: open early, withdraw gradually, keep the contract open.
FAQ
Do you have to report an assurance-vie withdrawal to the tax authorities?
Yes. Gains from a withdrawal must be reported on your income tax return for the following year. In most cases, the amounts are pre-filled using the information sent by the insurer. Check them: this is when the allowance is applied and any overpayment is refunded to you.
Does the €4,600 allowance apply to social charges?
No. The allowance reduces income tax only. The 17.2% social charges apply to the full gains from the withdrawal, with no allowance at all. On the euro fund, however, they have already been deducted each year.
Can you withdraw money from your assurance-vie without paying tax?
Yes, in two cases. If your contract shows a loss, no tax or social charges are due. And after eight years, if the gains portion of your withdrawals for the year stays below the allowance, you pay no income tax. Social charges, however, are still due on the gains.
How is a life annuity payout taxed?
Only a fraction of the annuity is taxable, and it depends on your age at the first payment: 70% before age 50, 50% between 50 and 59, 40% between 60 and 69, and 30% from age 70. This fraction is subject to income tax under the progressive income tax brackets. Unlike withdrawals, it has been subject to social charges at the new rate of 18.6% since January 1, 2026.
The taxation of assurance-vie looks complicated from a distance. Up close, it comes down to one idea: only what your money has earned is taxed, and less and less as time goes by. And you? Do you know what share of gains your next withdrawal contains?
Maclear AG is a Swiss peer-to-peer (P2P) lending and crowdlending platform, headquartered in Switzerland. The company acts as a financial intermediary in the non-banking sector and is a member of PolyReg SRO, in accordance with Swiss financial regulations, particularly regarding AML, KYC, and GDPR. Maclear provides individual and qualified investors access to carefully selected business loan opportunities, with integrated risk assessment, a Provision Fund, and a Secondary Market for liquidity.
The content of this article is provided for informational and educational purposes only. It does not constitute investment, financial, tax, or legal advice. Peer-to-peer (P2P) lending and crowdlending investments carry a risk of partial or total loss of capital. Past performance does not predict future results. Liquidity on a secondary market is not guaranteed. Readers are encouraged to conduct their own research and consult qualified advisors before making any financial decisions. The availability of products and services may be restricted in certain jurisdictions.