How to declare withdrawal from Assurance Vie?

[Finn Dooley]

I opened an Assurance Vie just over eight years ago, and now need to start making some withdrawals to help make ends meet.

I think I understand that withdrawals are taxed only on the gain element, and the first € 4,600 are exempt, but subject to the usual Social Charges of 11% rising to 12.1% next year. 

I'm trying to play around with the impots simulation program to work out the implication of withdrawal amounts and timings, but can't quite figure out what I should be entering where... [8-)]  please can anyone help?

[ams]

As you say e4,600 is allowed to be withdrawn tax free per year from the accumulated gains. This amount doubles to €9,200 in respect of married couples. Should you need more income then the excess of the above amounts will be taxed at 7.5%. You do have a choice on how you want the income in excess of the allowances to be taxed, it is at 7.5% or your own taxation rate. So as an example if your earnings were very low so that you did not make full use of the taxation bands and your personal allowances, then you have the option of declaring the income as normal income and having a rate of perhaps 0% or 5.5% applied to the excess income.

Example         

                                                                  €

Income withdrawn                                     12,600

Allowance single person                               4,600

Excess Income                                             8,000

Option 1 taxed at 7.5%                                   600

Option 2

treated as normal income 5.5%                        440

Any withdrawls of capital are tax and social cost free.

 

ams 

 

[parsnips]

  Hi,

     The CSG will be taken at source by the company.  As for declaring--the company will send you a document telling you where to enter on form 2042, this will come before the declaration date. When you decide if you want the" pélévement liberatoire " of 7.5% ,or to declare with your income,  confirm with the the company when you ask for your withdrawal.

[Finn Dooley]

Thank you both for prompt and informative replies.

ams - that's an interesting example.. I will not be receiving any pension for another 7 years and only receive a small amount of savings interest at the moment so would obviously go for your Option 2.  paying little or no tax.   Would you happen to know if the CSG would be calculated on 8000 or 440 ? 

parsnips - the AV was taken out just before I moved to France and although French "approved" is not a French one - so I don't think they'll be much help with this.  I do get a yearly statement showing increase (and lately decrease!)  in value, and I rather think I might be on my own when it comes to declaring withdrawals..[Www]

It looks as though I should opt for declaring as normal income - but should I do the calculations for growth and deductions myself,  and merely enter the result?  and if so I'm still not sure which box...[:$]

[parsnips]

Hi Finn,

       I have had some experience of declaring  a non-french LA Plan on behalf of a friend, and it is not easy. You have to identify the "gain" element in each withdrawal. If your plan is in €s this will be easier, but you have to take into account all gains or losses since commencing the plan when working out the gain.As your plan will be over 8 yrs old, I would (if it were me )keep my annual withdrawal under the tax-free limit, and not declare. However if you have shown the Plan details on your 2042 BoxTT,you will always have to keep the plan in being so as not to have to declare its closure. If you would be happier declaring, this should go in Box CH of 2042. The first time you could enclose a note explaining the origin of the revenu.

    If you would like some guidance on how I worked  out the gains you can PM me.

       

[Finn Dooley]

Thank you again Parsnips, this is becoming clearer by the minute.

Sadly, the contract is not €s but in £s (well, it seemed like a good idea at the time[:(]) - and I can well see the scope for huge complications!  I have ignored BoxTT to date, as I assumed conclu to mean "finished/closed/cashed-in"...

I will take your advice and do some more sums to see if I can manage to stay within the tax-free limit - I hadn't realised there was no obligation to declare anything in that case - I assume then it must be treated like Plus Values under €20k and non-declareable, and CSG etc would therefore not be applicable...?