In summary…
The capitalization contract is the lesser-known twin of assurance-vie: the same tax treatment for withdrawals, the same allowances of €4,600 / €9,200 after 8 years, and the same 7.5% tax. What most people don't realize is that its apparent drawback—it becomes part of the estate if there's no beneficiary clause—is actually its strength: it's given during your lifetime while retaining its tax advantages. It's also the only contract of its kind that a company subject to corporate income tax can hold, making it the go-to tool for corporate treasury management.
- Taxation of withdrawals is identical to that of assurance-vie., a tax reduction of €4,600 / €9,200 after 8 years, then 7.5% % + 17.2% %
- Passed on by gift while retaining its tax advantages, ideal in a split ownership/usufruct arrangement
- Available for subscription by a legal entity., the only investment vehicle of its kind accessible to a company subject to corporate income tax or a holding company
Simulate your capitalisation contract
The projection applies the same tax treatment as a redemption after 8 years as assurance-vie. Your data is neither stored nor transmitted.
Capitalization Contract Simulator
Plan your capitalisation contract, its capital gain and its taxation — the cousin of assurance-vie that is passed on.
Results are provided for illustrative and educational purposes only, based on the parameters entered and simplified assumptions (2026 tax year, constant return, excluding inflation). They do not constitute personalized investment advice, tax advice, or an offer to subscribe. Some investments carry a risk of capital loss. Before making any decision, consult an advisor.
Why the capitalization contract is the blind spot of wealth management
Assurance-vie dominates the minds of savers: it is the primary financial asset for the French, massively distributed through banking networks. Its cousin, the capitalization contract, remains largely unknown to the general public—not because it is inferior, but because it addresses issues that mass distribution does not: organized inheritance, division of ownership, and corporate cash management.
Throughout the life of the contract, the two accounts are identical: the same tax treatment for withdrawals, the same allowance of €4,600 (€9,200 for a couple) after 8 years, and the same 7.5% tax levied on the portion corresponding to premiums paid up to €150,000. A saver who simply wants to grow their capital will see no difference in practice.
The difference lies in the event of death—and this is where the capitalization contract reveals its unique nature. Assurance-vie is paid out outside of the estate via the beneficiary clause. The capitalization contract, on the other hand, becomes part of the estate and is passed on according to the rules of inheritance law. What might seem like a drawback becomes, in the hands of an advisor, a lever for early inheritance planning and a valuable business tool.
The 3 uses your bank advisor won't suggest
Lever 1: the gift which preserves tax seniority
Unlike assurance-vie, a capitalization contract can be given during your lifetime, In full ownership or through a split ownership arrangement, the recipient retains its tax advantages. In practical terms, the donee inherits a "dated" contract: if it has already been in effect for eight years, future withdrawals immediately benefit from the tax allowance and reduced rate, without having to start from scratch. You thus transfer capital. already tax optimized, whereas most cash gifts require the heir to rebuild their own prior inheritance.
Lever 2: the division of bare ownership / usufruct
You can give the bare ownership of the contract to your children while retaining the’usufruct, Therefore, the income is affected. The gift partially eliminates inheritance tax, the tax scale for usufruct reduces the taxable base according to your age (the earlier you gift, the lower the base), and upon death, the usufruct ends without additional taxes: your children become full owners free of charge. Unlike assurance-vie, no age threshold (the infamous 70 years) changes the situation—the strategy remains sound regardless of your age.
Lever 3: Investing company cash
A company subject to corporation tax — asset holding company, SCI subject to corporation tax — cannot take out assurance-vie, However, a company can hold a capitalization contract. This is the preferred solution for investing a company's excess cash in diversified assets rather than leaving it idle in a current account. The tax treatment is specific: a flat annual tax on a theoretical basis, adjusted upon redemption. For a manager with company cash reserves, this is often the first optimization strategy—and a topic that retail advisors rarely address.
Case study: Henri, 67 years old, retired notary in Aix-en-Provence
Henri has €300,000 in liquid assets and wants to plan for the transfer of his wealth to his two children while maintaining an income stream. He takes out a €300,000 capitalization contract, lets it accumulate at a net return of 4.5% for 5 years to reach the 8-year mark, and then transfers the bare ownership through a split ownership arrangement. Here's what the simulator and strategy project:
| Stage | Mechanism | Wealth effect |
|---|---|---|
| Subscription at age 67 | €300,000 invested at 4.5% net. | Capital that works, tax history that runs |
| Projected capital over 8 years | ≈ €426,000 | Capital gains tax-free |
| Gift of bare ownership | Usufruct retained, taxable base reduced by the age scale | ≈ 60 % of the value transmitted according to age |
| Upon Henri's death | Extinction of the usufruct | Full ownership to the children, without additional rights |
Henri retains the usufruct, and therefore the income from the contract, until his death, while having transferred the bare ownership at a reduced value according to the usufruct scale. The contract retains its seniority: his children receive an amount already exceeding 8 years, immediately optimized for their future withdrawals.
This case illustrates what assurance-vie cannot do: organize a transfer of ownership. during his lifetime, Progressive and reversible in its timing, without being subject to the age-70 cutoff. The capitalization contract is not just another investment — it is a fully-fledged wealth transfer tool.
A strategic tool, not just an investment
This simulator calculates the capital and tax implications of a redemption, identical to those of assurance-vie. However, the value of a capitalization contract lies not in these figures, but in the strategy surrounding it—gift with split ownership, timing of the transfer, and integration with a holding company or a company subject to corporate income tax. Taken out without a specific plan, it offers no more than assurance-vie. But when integrated into a business succession or cash management strategy, it becomes indispensable.
Balmont Conseil is an objective wealth management firm, a member of ANACOFI, with no capital ties to any bank. Our objectivity allows us to select the contract and investment vehicles across the entire market, and to build a wealth transfer or cash management strategy that truly serves your interests. Let's make an appointment to determine if the capitalisation contract has a place in your strategy.
Frequently Asked Questions
What is the difference between a capitalization contract and a assurance-vie policy?
During the life of the contract, there are no changes: the same tax treatment for withdrawals, the same allowance of €4,600 / €9,200 after 8 years, and the same 7.5% tax. The difference arises upon death. The assurance-vie policy is terminated. outside of inheritance via the beneficiary clause (€152,500 tax-free per beneficiary for premiums paid before age 70). The capitalization contract, however, does not have a beneficiary clause: it enters into the succession and is transmitted according to the rules of common law — which opens the way to gift and split of ownership during one's lifetime.
Why would being part of the inheritance be an advantage?
Because it allows for transmission anticipated, This is impossible with assurance-vie. You can gift the contract during your lifetime, either in full ownership or with a split ownership structure (bare ownership to children, usufruct retained), while preserving its tax advantages: the recipient receives a contract with a specific date, often already more than 8 years old. The gift partially eliminates the inheritance tax, the usufruct tax brackets reduce the taxable base according to your age, and upon death the usufruct ends without additional taxes.
Can a company hold a capitalisation contract?
Yes, and that's one of its main uses. A company subject to corporate income tax (such as a holding company or a French real estate investment company (SCI) subject to corporate income tax) cannot take out assurance-vie policies, but it can hold a capitalization contract. This is the standard solution for investing a company's surplus cash in diversified assets. The tax treatment is specific: a flat annual tax is applied on a theoretical basis, adjusted upon redemption. Setting it up is advisable to seek professional guidance.
Is there an age limit like the 70 years for assurance-vie?
No, and that's a significant advantage. In assurance-vie, reaching the age of 70 profoundly alters inheritance tax (a tax allowance of €152,500 before age 70, and a total allowance of €30,500 after). Capitalization contracts ignore this threshold: their logic of gifting and splitting ownership remains consistent regardless of your age. This makes them a particularly suitable tool for people planning their estate transfer beyond age 70.
How does Balmont Conseil differ from a bank advisor on this product?
Balmont Conseil is an objective wealth management firm, a member of ANACOFI, with no capital ties to any bank. A bank advisor rarely sells a capital redemption contract: it's not a cash flow product, and it requires complex structuring (gift, division of ownership, holding company structure) that goes beyond standard distribution. Our objectivity allows us to select the right contract from the entire market and integrate it into a business succession or cash management strategy truly tailored to your needs.
Results are provided for illustrative and educational purposes only, based on the parameters entered and simplified assumptions (2026 tax year, constant return, excluding inflation). They do not constitute personalized investment advice, tax advice, or an offer to subscribe. Some investments carry a risk of capital loss. Before making any decision, consult an advisor.
