Ask Amanda

When I lived in the U I invested in ISAs but now I’m living in France is there an alternative?

Assurance Vie, which translates to "life insurance" in English, is a longterm savings and investment product available to residents of France It combines the benefits of life insurance with the potential for capital growth

One of the key advantages of Assurance Vie is its tax efficiency Unlike traditional investment vehicles, such as stocks or real estate, the gains made within an Assurance Vie policy are not subject to income tax until they are withdrawn This means that investors can benefit from compounding growth over time without the burden of immediate taxation

Furthermore, after a holding period of eight years, investors can take advantage of significant tax advantages Any gains made within an Assurance Vie policy are subject to a reduced tax rate, known as the "prélèvement forfaitaire unique" (PFU), which currently stands at 30% This rate includes both income tax and social security contributions, making it an attractive option for higher-rate taxpayers

In addition to its tax benefits, Assurance Vie offers a wide range of investment and currency options to suit different risk appetites and financial goals Investors can choose from a variety of funds, including equities, bonds, and money market instruments, allowing for diversification and potential capital growth Many Assurance Vie policies offer the flexibility to switch between funds, enabling investors to adapt their investment strategy as market conditions change

Another appealing feature of Assurance Vie is its inheritance planning benefits In France, Assurance Vie policies you can leave €152,500 to a number of beneficiaries without inheritance tax This amount is reduced if you are over the age of 70 when you take out a policy This makes it an attractive option for individuals looking to preserve their wealth and pass it on to future generations

Furthermore, Assurance Vie policies offer a level of protection against creditors In the event of bankruptcy or financial difficulties, the funds held within an Assurance Vie policy are generally protected from seizure, providing investors with peace of mind and security