Declaring Assurance Vie Gains

I made a substantial withdrawal from my Assurance Vie, asking the provider to pay the french tax; They didn’t and told me that I would have to do it. I found this annoying, as it meant that the annual declaration would be more complicated than usual. When the time came, I declared it in box 2DH “produits soumis au prélèvement libératoire”. But in fact this is for produits déjà soumis… i.e. tax already paid. So I didn’t pay any tax! I discovered this several month later, and after discussions withy my local tax office, I have had it corrected, and haven’t had to pay a penalty, but I do have to pay at the flat tax rate of 30% (rather than the 24.7% rate (7.5%+17.2%) expected.

I should have used form 2778 for declaring the gains within a month of withdrawal. I didn’t even know of the existence of the form, and didn’t even know that you had to make some declarations outside of the annual cycle. This is the reason for my post - just in case there are other forum users who didn’t know this either - as a warning!

The other reason, is to ask if there are other cases to make instant declarations, e.g. for dividends? This could be relevant to me as I still have investment ISAs which report “income” such as distribution reinvested. I declare these on 2047 as 2DC …dividendes… (though perhaps 2TS (autres revenus distribués) might be more appropriate?
I believe that the “flat tax” is being taken off, so it should be ok?

But might this cause problems during a “control” if I haven’t already declared as dividends? Though I couldn’t do it at the time of “receiving” them - given that I only find out about them in the annual ISA statement.



This is why we have an accountant, an expense but worthwhile for peace of mind.
Also our Assurance Vie is one which complies with all French tax requirements.

That’s a bummer Dave. Would you not go after the provider for the difference? I have my assurance vies with and through HSBC and between one thing and another there’s been quite a bit of churn over the last seven years and they’ve always advised me well and minimised the tax impact and paid it at source.

As I outlined in another thread, this area is very complex and may require the services of an accountant in order to get it right.

Consider this paragraph from a post in the Revolut community (concerning gains on Revolut Trading Accounts but applies just the same here imo):

In theory, when you receive dividends, if your “revenu fiscal de référence” is above 75k€ for a couple, you must, before the 15th day of the following month, fill-in the 2778-DIV-SD form and send it to your local tax office with a check worth 21% of your perceived dividends, as an advance you are making to the tax authorities. And do this every time you receive dividends. To be honest, my advice is that you can skip this and just declare your dividends of foreign origin once a year, you should be fine with this approach.

The full post/thread can be seen here

Note that the Revolut thread OP cautions that he is not a professional and accepts no responsibility if the advice is incorrect. He writes “This is my understanding and own interpretation, I cannot be held liable if you follow this and it is not accurate”.

Thanks Jane
I did have an accountant paid for by my employer the year of my “mutation”. After that, I used their return as a model. But they didn’t tell me that I had to declare ISA “income”!
You are right, that I would have had peace of mind all these years, as I wouldn’t have been worrying that I was making mistakes…

My Assurance Vie complied with all French tax requirements. Hansard didn’t comply with what their documentation said that they would do.

Yes John.
I will do. I’m waiting until I calm down before writing…

Thanks Graham

As I have just retired, next year I will be below the threshold anyway.

I think what I find frustrating is that I have being “sucked in” to this complex area…
I am a small scale investor, just trying to be prudent. Any spare money I had back in England, I used to pay off my mortgage, and when that had been done I invested in PEPs and then ISAs (up to the annual limit). Nothing flashy, just tracker funds and bonds. Then when I was moved to France I was told that I could leave the ISAs as they were, and then carry on investing in them on my return to the UK. It seemed the easiest thing to do.

Similarly, for the Assurance Vie, I was advised that this was a popular tax-efficient investment. I thought it would be straightforward…

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If you will become a UK resident again some time in the future, then best to keep your ISAs, but if you stay French resident, very expensive cashing them in. No way out of this problem. Highly frustrating when we think we had good investments.

Yes, my conclusion also.

Just as a post-script to my initial post… it turns out that it is not the flat tax that I have to pay (after missing the prélèvement forfaitaire libératoire ) - but instead I shall be taxed au barème. This will push me into a higher tax band. I have estimated that I shall be paying over €10k in unecessary taxes! So I am not a happy chappie :scream:
Dave Huddart

Ouch! :face_with_head_bandage:

Ouch indeed!

Thank you for the reminder as we have an assurance vie that one day may be called on.

Further postscript.
I received full compensation from the insurance company.
They say all’s well that ends well…
but in this case the sense of relief didn’t really match the degree of anguish and frustration over the past few months

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Whilst I have no expert knowledge of Ass Vie income… I do know that there is something on the Annual WWide Income Declaration which one ticks or crosses in order that one’s real situation is taken into account for oddments which attract tax…

was it box 20 P … ??? something rings a bell, that if one did not choose that option… one would/could end up being taxed way over and above…

I’m sure @graham will remember what I’m talking about and probably others too…
Something for newbies to watch (and others ?) when filling in the Declaration.

The point is that you have to declare the gains and pay the tax within (I think) a month of the gains to qualify for the beneficial tax treatment.
Yes you need to remind them (of what you have already done), on the annual form, but if you wait until the annual form to declare it is already too late (even if you have an accountant)
The reason I posted in the first place, was that in all my reading on taxation I had not seen any mention of this, except to say that the Assurance Vie company will take care of it - which indeed they should.

There is a difference between declaring that you have one - which you have to do in annual declaration for information (a bit like with bank accounts) and declaring gains which has to be done to strict deadlines outside tax cycle (a bit like declaring plus-value in house sales).

@JaneJones @graham

Yep… folk must be sure to choose 20P…

Not talking about declaring having an Assce Vie… I’m talking about the importance of 20P

A bit of thread drift……:upside_down_face: although perhaps useful to get us limbered up for starting to think sorting papers for next declaration…

20P is to stop being subject to the automatic 30% flat tax on things like fixed term accounts and so on. Extremely useful for people on low incomes who are under tax threshold. But don’t see the relevance for assurance vie? Which is what the thread is about. As far as I know these gains are declared straight away, outside the tax cycle.