French Executive Portfolio note

Important information concerning Assurance Vie taxation in as at 13 November 2020

This is a summary of the French tax regime for the taxation of investment linked Assurance Vie policies when the policyholder is tax resident in France. The information below is only to be used in connection with the Quilter International Ireland dac French Executive Portfolio. It may not be appropriate to apply this information to other policies issued from other companies in other jurisdictions.

Introduction Taxing chargeable gains on full What are the tax rates if you fully surrender, part surrender or receive The French Executive Portfolio is a surrender, part surrender and a regular withdrawal payment during whole of life investment linked regular withdrawal payments the first 8 policy years? Assurance Vie policy issued by Quilter The flat is 30% which is made up International Ireland dac (Quilter When you fully surrender the policy or from at 12.8% and social sur International) a life insurance company request a part surrender of the policy or at 17.2%. A lower rate of social regulated by the Central Bank of set up regular withdrawal payments, a charges at 7.5% applies if you are Ireland. This tax note is a summary of taxable gain arises when the surrender covered by the health system of another your tax position in France when you value amount exceeds the premium EU or EEA country and not affiliated to surrender the policy in your lifetime or amount remaining in the policy at the the French scheme. if the death benefit becomes payable. time. Where you have provided Quilter International with a tax mandate, in the Declaring chargeable gains and taxes The information in this note is not first 8 years Quilter International will withheld during the first 8 policy years exhaustive and is subject to changes in deduct social taxes of 17.2% and income Where Quilter International has a tax legislation. It is a summary of how you tax of 12.8% and thereafter Quilter mandate we will deduct social taxes of and your beneficiaries will be taxed and International will deduct social taxes of 17.2% and income tax of 12.8% from the is based on Quilter International’s 17.2% and income tax of 7.5%. You may chargeable gain arising at the time of the interpretation of French law and have a further tax liability and you will surrender, part surrender or regular taxation as at July 2020. Before need to declare and pay this in France. withdrawal and will then pay you the proceeding with any investment you You can elect to be taxed on the gain at balance. If we do not have a tax mandate should take advice from your financial the progressive rates of income tax we will pay the full withdrawal amount to adviser to confirm how you will be rather than the , but you must do you – in order for you to report and pay taxed in your country of residence. this yourself directly with the tax any taxes due. authorities through your annual tax Declaring your French return and then seek an adjustment to What are the tax rates if you fully Executive Portfolio to the your tax liabilities for the year of surrender, part surrender or receive a assessment. regular withdrawal payment after the French tax Authorities first 8 policy years? You and your financial adviser may As a French tax resident, in accordance When a chargeable gain arises on a decide you do not want to provide a tax with Article 1649AA of the French surrender, part surrender or regular mandate to Quilter International and you General Tax Code, you must declare your withdrawal payment after 8 policy years, want to report and pay the taxes which French Executive Portfolio each year in the flat tax is payable as follows. your annual French tax return. You will are due personally. There are strict need to include the following timescales for reporting and paying your An income tax rate of 7.5% is charged information; product name and number; taxes and you need to ensure you are on the gain arising from the surrender commencement date and duration; aware of these and comply otherwise payment attributable to the premium policyholder name and address and you will be liable for late reporting paid up to the premium threshold of date and place of birth; regular penalties. €150,000. withdrawals and part surrenders during However, Quilter International will not be An income tax rate of 12.8% is charged the previous tax year; any relevant able to action any request for us to on the gain arising from the surrender amendments; Quilter International accept a tax mandate after the start of payment attributable to the premium address and type of policy. the policy and if you have already paid above the premium threshold of confirmed that you wish to report and €150,000. pay taxes yourself. The premium threshold of €150,000 is that part of your policy’s surrender As the policyholder, if you are tax available to each policyholder but must value as at 1 January each year which is resident in France at the time of your be proportioned across all the made up of real estate assets in France. death or if not resident, your Assurance Vie policies you own. For instance, if at least 10% of your beneficiaries are tax resident in France premium is invested in a collective at the time of your death and have To explain how the premium threshold investment scheme and this fund has at been tax resident for six years during is applied to your policy we have least 20% of its assets invested in real the ten years prior to your death, tax is provided the following example. A estate, you must declare for payable by the beneficiaries as follows. premium of €200,000 was paid and purposes the relevant amount of the at the time of the surrender in year 10, The taxable benefit is the amount of policy surrender value. there was a chargeable gain of premium capital, ignoring any growth, €100,000. 75% of the premium is up to Taxing the death benefit payable to each beneficiary after the threshold of €150,000 and 25% of deducting a total allowance of €30,500 the premium is above the threshold. Paying social security taxes on the which must be shared across all the These percentages are then applied to death benefit policies you owned at the time of your the gain so that €75,000 is taxed at The chargeable gain arising on the death. tax is payable by the 7.5% and €25,000 is taxed at 12.8%. termination of the policy when the beneficiary at the rate appropriate to their relationship with you as the Some taxpayers could be subject to an death benefit becomes payable is liable deceased policyholder. exceptional contribution on high to social taxes of 17.2%. In addition to income (ECHI) at a rate ranging from Social Taxes and subject to the Deduction of taxes on death 3% to 4% (ie. if the global taxable exemptions listed below, tax is charged on the death benefit payable to your Quilter International does not deduct any income called ‘revenu fiscal de taxes due on the payment of a death reference’ exceeds 250,000 for beneficiaries; subject to the conditions in Articles 990 I and 757 B of the benefit and responsibility for payment and single, divorced and widow individuals reporting rests with your beneficiaries. or EURO 500,000 for married, or PACS General tax Code. (civil union) filing jointly. In certain circumstances, beneficiaries Leaving France If you decide to leave France and Social taxes at 17.2% are charged on will be exempted from tax on the become resident elsewhere you should the total gain on top of the above death benefits when the beneficiary consult with a tax adviser before you income tax rates. is the surviving spouse or ‘pacte civil de solidarité’ of the deceased move to ensure your policy remains A tax allowance of €4,600 for a single policyholder; brothers and sisters of appropriate for your needs. person and €9,200 for a married the deceased who are aged over 50 couple taxed jointly can be claimed by and who are single, widowed, divorced the policyholder(s). or legally separated; brothers and Tax reliefs and allowances Declaring chargeable gains and taxes sisters with a disability that prevents According to Art 125-0A of GTC, withheld after the first 8 policy years them working and who have been living with the deceased policyholder during in certain circumstances, Where Quilter International have a tax the past 5 years. policyholders will not be liable mandate we will deduct social taxes of to taxation when the policy is 17.2% and income tax of 7.5% explained Benefit payable from premiums surrendered in the same year above from the surrender payment and paid before the life assured’s 70th as the following events occur: will send this and declaration form 2778 birthday (Article 990 I of the CGI) to the French Tax Authorities within 15 As the policyholder, if you are tax – You surrender the policy days of the end of the month in which resident in France at the time of your and purchase an annuity the surrender amount was paid to you. death or if not resident, your – You or your partner are Quilter International will apply this beneficiaries are tax resident in France dismissed from employment regardless of the premium threshold or at the time of your death and have been and affiliated to the ‘pole other allowances. tax resident for six years during the ten emploi’ as a job seeker You may have further tax to pay or you years prior to your death, tax is payable by the beneficiaries as follows. – You have your self- may be able to reclaim any overpaid tax employment terminated as through your annual tax return. You Each beneficiary has a total deduction a result of a judicial action should discuss this with your financial (€152,500) for all Assurance Vie death adviser if this applies to you. benefit payable in relation to the same life – You are subject to compulsory assured without paying tax. Tax is then early retirement Real estate wealth tax payable at 20% on the next €547,499 – Your beneficiary or their spouse Wealth tax, known as ‘l’impôt sur la (152,501 to 700,000) €700,000 and at suffers a disability corresponding fortune immobilière’, is payable on real 31.25% on any amount above €700,000. to the second and third estate assets located in France and Benefit payable from premiums paid categories of Article L.341-4 of worldwide for French tax residents. In after the life assured’s 70th birthday the Social Security Code. certain circumstances you must declare (Article 757 B of the CGI) www.quilterinternational.com Calls may be monitored and recorded for training purposes and to avoid misunderstandings.

Quilter International Ireland dac is regulated by the Central Bank of Ireland. Registered No 309649. Administration Centre for correspondence: King Edward Bay House, King Edward Road, Onchan, Isle of Man, IM99 1NU, British Isles. Tel: +353(0)1 479 3900 Fax: +353 (0)1475 1020.

Registered and Head Office address: Hambleden House, 19-26 Lower Pembroke Street, Dublin 2, D02 WV96, Ireland. VAT number for Quilter International Ireland dac is 6329649S.

Quilter International is registered in Ireland as a business name of Quilter International Ireland dac.

20734/INT21-0125/March 2021