Just getting a quote for renewal of OH’s Term insurance, and trying to decide the amount of cover. This is a basic term policy - no investment element - and is meant to be a bit of a safety cushion for me should he fall off his tractor or something.
It suddenly struck me that the payout might be taxable here in France - which would make quite a difference.
Could anyone point me in the direction to find out please?
Which country will the policy be taken out in, may make a difference?
Our French life policy that ran along side the mortgage wasnt taxable in France. It turned out much later ,as we were not french residents it also would not have paid out.
Hi - thanks for responding.
It’s a UK policy, one of the few that will accept French residents.
Some years ago I looked at the French equivalent, but realised that they are really designed for loans and mortgages, as you describe, and not the sort of “Family/Spouse” cover that I’m aiming for.
I’m concerned that it may be categorised like an Assurance Vie for example and therefore liable for a hefty chunk of Tax & Social charges, which would have a large effect on the intended benefit.
If you specify for the dealings to come under UK law, assuming you still are on UK passports it will form part of the UK agreements which would not be taxable but safer left under a trust deed to a named beneficficiary as it will not then form part of the deceased estate, not kowing your relationship.
My info is years out of date so I recommend getting professional up to date advice, especially post Brexit.
Thanks again - it’s all sounding a bit technical (expensive?!).
I would be the Policy Holder and he would be the Life Assured, so I guess in the event of a claim/payout it comes to me anyway (we are married).
Is it an unusual thing to have life cover here in France? I would have thought it to be a great help in a difficult and stressful time. If it’s fairly common, then if subject to tax/soc charges etc it would have quite an impact…
Can I get @fabien to jump in here please ?
Hi @cat thanks for tagging me along but this is related to tax laws and investment products so not sure I’m the most qualified for this. Beside, I don’t really know what an “OH” policy is although I think I can deduct its purpose based on the other comments The rule for a “loss of income” type of policy is that it replaces the income so it’s taxable as such (an income). Then different products have different kind of taxes which are French specific so if the policy isn’t French it complexifies the matter even more. For example there are tax deductions on a French “life insurance / assurance vie” based on how long you hold the policy. If the policy has been taken out in France I suggest asking the person who sold it to you. If it’s a foreign policy then my little finger is telling me that any payout would be taxable as it’s not part of any particular French insurance scheme… but that’s only my gut feeling so to be taken with buckets of salt.
Thank you again. “OH” is not a type of policy, but a standard abbreviation for “Other Half” ie husband/wife/partner.
As I mentioned above, this is not an investment type product such as an Assurance Vie, more a straight insurance where there is no investment element and the premiums are not refunded in the event of no claim. Bit like House or Car insurance.
I shall continue to research - although I find it hard to believe nobody has this type of cover here in France - I think it’s also known as Family Protection.