In summary…
Upon your return, any life insurance policy taken out abroad must be declared annually with your income tax return, and any withdrawals are taxable in France. The decision to keep or withdraw the policy is based on three criteria: its age, its fees, and its provisions for inheritance.
Our position: we don't buy back automatically, and we never leave a contract undeclared. The first step is to declare it; the second is to check the eight-year mark, which changes the tax regime.
«"My contract has been open for six years, I'm returning in January: do I close it before or after?" This is a typical question in a return application, and the answer doesn't begin with the buyout. It begins with what France requires upon arrival, and then with what leaving would cost.
1. Declare: an annual obligation, contract by contract
The contract is included in your tax return as soon as you are domiciled in France.
Once your tax residence is in France, you must declare annually any accounts and life insurance policies opened, held, used, or closed abroad. Life insurance and capitalization policies are declared using the same form as bank accounts; the declaration is annual, attached to your income tax return, and separate for each policy. Our article on information to gather for the form draws up a list of the documents to request from the insurer, and the one on the declaration of the contract opened abroad the instructions for use.
The cost of an oversight: a fixed penalty per undeclared contract, higher if the country in question has not concluded an administrative assistance agreement with France. This may be compounded by an increase in the back taxes owed, when the tax authorities recover undeclared sums.
Specifically. A contract can sometimes surface without you even looking for it: the automatic exchange of information between states covers financial accounts, and the French tax authorities receive this data for French tax residents. Declare first, discuss later.
For the technician. Article 1649 AA of the French General Tax Code (CGI): Capitalization contracts and similar investments, including life insurance contracts, taken out with organizations established outside France must be declared with the income tax return. Penalties: Article 1766 (fixed penalty per contract, see the commentary on Constitutional Council decision no. 2021-939 QPC), Article 1729-0 A (increased penalty). BOFiP: BOI-CF-CPF-30-20 and BOI-CF-INF-20-10-50. Consolidated text of these articles can be found on Légifrance for the current amounts.
2. What a buyback costs once you are a resident in France
The plan depends on the insurer's institution, the age of the contract, and the premiums paid.
The proceeds of a contract taken out with an insurer established outside France are taxable in France as foreign securities. Only the gains are taxed, not the principal. For a contract taken out with an insurer established in the European Union or the European Economic Area, the gains benefit, after eight years, from the same annual allowance of €4,600 (€9,200 for a couple) as for a French contract, under the same seniority conditions; the allowance applies globally to both your French and foreign contracts. For an insurer established in another country, this tax treatment must be verified on a contract-by-contract basis: a contract taken out outside the European Union and the European Economic Area may not be eligible.
Social security contributions are added to this. For life insurance, the official 2026 pages indicate a rate of 17.2%, compared to 18.6% for the general investment rate. The rate applicable to a contract taken out abroad must be confirmed with the tax authorities before calculating a redemption; see Our update on social security contributions in 2026. The income tax rate depends on the contract's age and the amount of premiums paid. Older premiums may be subject to a separate tax regime. See the article on the date of payment of bonuses..
For the technician. Articles 120, 6° and 122, 2° of the French General Tax Code (foreign securities; extension of the allowance to contracts entered into in a Member State of the European Union or a party to the EEA Agreement that has an administrative assistance agreement with France), Article 125-0 A of the French General Tax Code. BOFiP: BOI-RPPM-RCM-20-10-20-50, Part II (version of 20/12/2019 read; the version of 30/06/2022 could not be read). Details in our articles on Taxation of buybacks based on seniority and the annual allowance.
Case: buying back before or after eight years
Situation. A married couple, who file their taxes jointly, are returning to France. They have held a policy with an insurer established in the European Union for the past six years.
Issue. Buy it back immediately, even though the contract is less than eight years old, or wait until the eight-year anniversary, which opens the annual tax allowance.
Strategy. The couple first checks the insurer's establishment, then has the tax calculated in both cases based on their premiums and actual earnings, including social security contributions, before deciding anything.
Result. The decision is made on this numerical calculation, contract by contract, and not on an average rate: seniority changes the regime, costs and transfer weigh as much as the tax.
3. Keep, buy back, or trade: three questions before deciding
Seniority. The eight-year mark changes the tax regime and triggers the tax relief. If the contract reaches this milestone in a few months, the difference between the two calculations reflects the price of impatience.
The cost of the contract. Entry fees, management fees, arbitration fees: a foreign contract is judged on these points, just like a French contract. Our article on entry, management and arbitration fees provides the framework for interpretation. For a Luxembourg contract, see also the purchase by a French resident.
Passing on your estate. The contract was often taken out for inheritance purposes. The rules regarding death benefits (Article 990 I or 757 B of the French General Tax Code) depend on the date the premiums were paid and the insured's age. The levy under Article 990 I may apply to a contract taken out with an insurer established outside France: the determining factor is the insured's tax residence at the time of death, or that of the beneficiary if they are domiciled in France and have been for at least six of the ten preceding years. The beneficiary clause is reviewed upon return, because the family, too, has moved to a different country. See our article on death and articles 990 I and 757 B.
Frequently asked questions
Is a declaration required by contract?
Yes: each account, contract or investment is subject to its own declaration, each year. Two contracts, two declarations.
Does the foreign insurer forward my contract to the French authorities themselves?
Automatic exchanges of information between states concern the financial accounts of French tax residents. They do not exempt you from filing a tax return: the obligation is personal and annual.
My contract is less than eight years old: should I wait to buy it back?
It depends on your liquidity needs and the cost of the contract, not just the rate. Compare the tax in both cases, as described above, then add the fees and inheritance tax implications.
Do you have a foreign contract and a return planned?
The initial consultation is used to review your contracts, verify their dates, prepare the declaration, and analyze buyback scenarios. We are an insurance broker, and we are not presenting any products in this article.
Are you a notary, chartered accountant, lawyer, or fellow consultant? And your client returns with a foreign contract? We intervene in a joint venture on the contract file (documents, declaration, costing of the buyback): the client remains yours.
Book an appointment
The initial consultation is to establish your exact situation and determine if there is anything that can be done—sometimes there is nothing, and we will say so as well. Thirty minutes, with no obligation.
Book an exchange with Balmont Conseil
Alexis Sagnier, financial and real estate investment advisor, insurance broker, AMF certified. ORIAS 13003497. Updated on 23/10/2026.
Official sources consulted
- Service-Public.fr — Income tax, return from expatriation
- Service-Public.fr — Do we have to declare accounts opened abroad?
- Service-Public.fr — Declaration of accounts opened, used or closed abroad
- Service-Public.fr — Social security contributions on investment income
- Economie.gouv.fr — What are the tax implications of assurance-vie?
- BOFiP — BOI-RPPM-RCM-20-10-20-50 (version of 12/20/2019)
- BOFiP — BOI-TCAS-AUT-60 (withdrawal from article 990 I)
- Constitutional Council — Commentary on decision no. 2021-939 QPC
- National Assembly — Written Question No. 39208 (exchanges between DAC 2 and CRS)
