Annuity purchased for valuable consideration: what portion is taxable depending on your age

A purchased life annuity is not fully subject to income tax. Only a portion is taxed, and this portion depends on your age at the time of the first payment: 70% before age 50, 50% from age 50 to 59, 40% from age 60 to 69, and 30% from age 70 onwards. This portion is fixed in the year the annuity begins and remains unchanged thereafter, except in cases of reversion or when the annuity is transferred to another beneficiary (see below).

This page covers calculating the taxable portion and how to declare the annuity. It does not address social security contributions on these annuities, nor the taxation of annuities from insurance contracts or retirement savings plans (PERs), nor temporary annuities. For these latter cases, the income tax guide classifies certain annuities under the same heading, "life annuities for valuable consideration": their treatment should be verified with official sources before filing.

What kind of annuity are we talking about?

A life annuity for valuable consideration is paid in exchange for the sale of an asset or capital. Fact sheet F3173 on service-public.gouv.fr defines it in its glossary as: "Regular income paid in exchange for the sale of an asset (a dwelling, for example) or capital." The BOFiP (Official Bulletin of Public Finances) specifies that the person receiving the annuity has voluntarily agreed to relinquish an element of their assets.

The practical guide to income tax 2026 (income 2025) includes the following in this category:

• annuities received in consideration of the sale of a building or a business (life annuity sale); ;
• the annuities resulting from the conversion of the surviving spouse's usufruct; ;
• annuities established in a division, as a balancing payment, to compensate for the inequality of two lots; ;
• annuities paid in execution of a gift inter vivos clause, as a charge imposed on the donee.

The brochure also includes other annuities in this category: annuities established with insurance companies "in exchange for the payment of a lump sum" and certain retirement savings plan (PERO, PERIN, PERECO) exit annuities. These are not addressed here and should be verified before filing a claim.

Conversely, a gratuitous life annuity is received as a result of a gift or will, without any consideration. It is taxed as a pension: the fractional rule described below applies to annuities acquired for valuable consideration.

The four taxable portions

The BOFiP (version in effect since 21/05/2026) and the service-public.gouv.fr information sheet give the same fractions. The 2026 income tax brochure links them to a line in the tax return:

Service-public.gouv.fr puts it this way: "A portion of purchased life annuities is subject to income tax."«

How age is valued

Three points determine the percentage.

• The reference date. Age is assessed on the day the annuity begins to be paid (BOFiP), which the table on service-public.gouv.fr designates as the age at the first payment.
• A fixed fraction once. The BOFiP (French Official Tax Bulletin) states that "the taxable portion is fixed in the year the annuity begins; it then remains unchanged." For a single annuitant, aging does not move the annuity into the next tax bracket.
• Cases of reversion or successive beneficiaries. The BOFiP and the brochure set out specific age rules. These are summarized below.

The reversible annuity

• BOFiP. For a reversionary annuity payable to the surviving spouse, the age used is generally that of the youngest annuitant. For an annuity established for the benefit of a household with reversion to the surviving spouse, the BOFiP (French Official Tax Bulletin) uses the age of the eldest spouse at the time the annuity payments begin, and indicates that this solution applies to reversionary annuities between spouses "when it is more advantageous.".
• An annuity received successively by several people. When the same annuity is received successively by several people other than the husband and wife, the BOFiP takes into account the age reached by the new beneficiary at the time when he receives the arrears for the first time.
• Brochure 2026. During the marriage, the brochure uses the age of the older spouse when the annuity payments begin. After the death of a spouse, it uses this same age or "the age of the survivor at the date of death, if this is more favorable.".

The BOFiP and the brochure are not written in the same way: for a reversible annuity, check the text applicable to your case in the official source before calculating.

How to declare the annuity

You enter the amount received on the line that corresponds to your age bracket, 1AW, 1BW, 1CW or 1DW. The taxable amount is calculated automatically, according to the brochure.

Three points of clarification regarding the statement:

• The 10 % discount is not mentioned for these lines. The brochure states that the 10% % allowance is "automatically applied to the total amounts entered on lines 1AS to 1DS." It does not mention an allowance for lines 1AW to 1DW: check the brochure before filing. A separate page provides information on the pension allowance.
• Foreign-sourced income. For taxpayers domiciled in France for tax purposes, the brochure advises against entering foreign-source income that qualifies for a tax credit equal to the French tax on lines 1AW to 1DW. Instead, it should be declared on lines 1AR to 1DR, with the information from form 2047 transferred to box 8TK of form 2042.
• Form. For the 2026 tax year (income earned in 2025), service-public.gouv.fr lists the paper form "Declaration 2026 of 2025 income" (R1281) and offers an online service, "Declare your income online." The forms and information should be double-checked for the 2026 tax return.

The lump sum of a life annuity sale

In a life annuity sale, the initial lump sum payment (bouquet) is treated separately from the annuity payments and is not subject to the rules governing fractional payments. Service-public.gouv.fr states that it "is not considered income," but that it is subject to the capital gains tax regime for real estate. Capital gains may be exempt, particularly when the property sold as a life annuity is the seller's primary residence. This page does not provide further details on this exemption.

Numerical example (fictitious profile)

Situation. Pierre and Hélène each sell their property as a life annuity. Each receives an annual payment of €12,000. Each is the sole annuitant, with no reversionary benefit. Pierre receives his first payment at age 59, Hélène at age 60 (hypothetical scenarios).

Issue. What amount does each person carry in their taxable base, and what happens to this base ten years later?

Strategy. Read the age bracket on the day of the first payment, apply the fraction, then check that the fraction does not change.

Result.

For comparison, the same annuity of €12,000 would give €8,400 of taxable share to a creditor under 50 years of age (70 %) and €3,600 to a creditor aged 70 or over (30 %).

Ten years later, Pierre is 69 years old. In this scenario of a single annuitant without a reversionary pension, his share remains 50 %: the taxable portion remains €6,000 per year. The one-year difference in the first payment separates the two tax bases by €1,200 per year.

These profiles are fictitious. The calculation only considers the taxable portion: it does not apply the income tax scale, which depends on all your income, and it does not predict your individual situation. To verify the method, here are two official examples: €2,000 in pension benefits received at age 65 results in €800 to be declared (service-public.gouv.fr), and €5,500 received at age 42 results in €3,850 (2026 income tax brochure).

What changes depending on your situation

• The age at which the first annuity payment is made, which determines the fraction, except in cases of reversion or annuity which passes to another beneficiary.
• The nature of the annuity : for consideration, free of charge, annuity from an insurance contract or a PER, the classification of which is verified.
• A reversible annuity, with its own age-related rules.
• An annuity from a foreign source, declared on other lines.
• Social charges, which this page does not address and which should be verified with official sources before making a decision.
• Your tax residence.

The rule depends on your situation. No results are guaranteed.