Assurance-vie and the French wealth tax (IFI): what is included in the tax base, and where to declare it

A redeemable assurance-vie or capital redemption contract is subject to the French real estate wealth tax (IFI). However, not its entire value. Only the portion representing units of account comprised of taxable assets, i.e., real estate, is taken into account. This is calculated based on the redemption value and declared on line 9CA of form 2042-IFI.

The principle: the buyback value, for the real estate portion

Redemptible assurance-vie or capitalization contracts must be declared for the French Wealth Tax (IFI). The basis for calculation is the contract's surrender value (Article 972 of the French General Tax Code). The official tax guidelines (BOFiP) on IFI, in effect since June 5, 2024, confirm this. The tax administration's page on assets to be declared, updated on April 1, 2026, refers to "your redeemable assurance-vie or capitalization contracts.".

The crucial detail: only the portion representing units of account comprised of taxable assets is considered. A contract with a portion invested in non-real estate assets is not taxed on that portion.

What exactly does the administration retain

The BOFiP (Official Bulletin of Public Finances) dedicated to contracts details the rule:

• The redemption value of unit-linked contracts is retained only for the portion representing taxable assets; ;
• These assets are valued as if you held them directly, in your subscriber's assets; ;
• the value of a non-redeemable contract does not have to be declared; ;
• No value is retained for a collective investment undertaking (CIU) which contains little taxable real estate, when the holder owns a small share.

The exact thresholds for this last rule are set out in the BOFiP (section II, paragraphs 60 to 210). Read them before concluding that a UCITS fund in your contract is outside the tax base.

What goes in, what doesn't go in

What this means in practice

Three consequences.

A contract is affected as soon as part of its units of account relates to real estate, subject to the rules for UCITS. This portion matters. The IFI (French wealth tax) doesn't look at the name of the investment vehicle: it looks at what it represents.

The contract is valued as if you owned the assets. The BOFiP operates on a principle of transparency: real estate assets are treated as if they were directly part of your assets.

The rest of the contract is not affected. The portion that does not represent taxable assets is not added to your real estate assets.

Three steps to find out what you need to declare

1. Is the contract redeemable? If it is not, its value does not have to be declared.
2. What portion of the redemption value represents taxable assets? This is the fraction to remember.
3. What is your total when combined with the rest of your real estate assets? It is this total that is compared to the threshold.

The second step is the most delicate. It involves examining the investment options within the contract to see what they hold. Ask the insurer for a detailed breakdown of each option. If they cannot provide this information, the BOFiP (French Official Tax Bulletin) refers to point 3 of Article 965 of the French General Tax Code (CGI) regarding information that cannot be obtained in good faith: this case should be reviewed with your advisor. Then, keep a record of the calculation used, option by option.

Where to declare it: line 9CA

Form 2042-IFI includes a line that covers this situation: line 9CA, for assets held indirectly. This line applies to both shares and unit-linked funds. It includes the portion of the value representing real estate held through unit-linked funds within a assurance-vie or redeemable capitalization contract.

The administration's 2026 practical guide describes this line on page 339 (the scale is on page 338). It uses the formula "fraction of the value of the shares or stock representing the buildings".

The threshold to keep in mind

The IFI tax scale starts with a first exempt bracket, up to €800,000. The threshold applies to net taxable real estate assets exceeding €1.3 million (2026 practical guide).

Why this matters here: the portion of the contract you declare is added to your net taxable real estate assets. It can push them above the threshold.

Numerical example (fictitious profile)

Situation. A fictitious business owner has a net taxable real estate portfolio of €1,200,000. He also has a redeemable assurance-vie policy of €500,000, of which 40% of the value represents real estate through unit-linked funds.

Issue. He believes he is below the threshold of 1.3 million euros. He is not including the contract.

Strategy. Identify the portion of the contract representing real estate, then add it to your net taxable real estate assets before comparing it to the threshold.

Result. Portion to be declared on line 9CA: €500,000 × 40 % = €200,000. Net taxable real estate assets: €1,200,000 + €200,000 = €1,400,000. This is €100,000 above €1,300,000, whereas it would have been below that amount without the contract.

CALCULATION: 500,000 × 40 % = 200,000; 1,200,000 + 200,000 = 1,400,000; 1,400,000 − 1,300,000 = 100,000. The €1,200,000, €500,000 and 40 % are assumptions of the hypothetical profile; the threshold of €1.3 million comes from the 2026 practical brochure.

What changes depending on your situation

• The composition of your materials. Whether or not it's real estate: the taxable portion depends on it.
• The redeemable nature of the contract. The value of a non-redeemable contract does not have to be declared.
• The type of UCITS held in the contract. The thresholds set out in the BOFiP (Official Bulletin of Public Finances) may exclude it from the tax base.
• The rest of your real estate assets. It determines whether the threshold has been reached.
• A contract taken out abroad. It is not addressed on this page: it is examined on a case-by-case basis.

No result is guaranteed in advance.

Which source says what

• The BOFiP PAT-IFI-20-30-20, in force since 05/06/2024, establishes the principle: redeemable contracts are concerned, for the fraction representing units of account made up of taxable assets.
• The BOFiP PAT-IFI-20-20-30-30, in force since 08/06/2018, details the evaluation and the cases where no value is retained.
• The administration page The document on assets to be declared, amended on 01/04/2026, reminds us that redeemable contracts must be declared.
• The practical brochure 2026 gives line 9CA, the scale and the threshold.