We advise Béatrice to speed up the transfer of her assets and to reorganize her financial investments in favor of low-tax life insurance.
Béatrice discovered the joys of digital technology during the first confinement. Since then, she’s glued to her smartphone all day. She has fun, like millions of French people, to circulate on social networks schoolboy jokes, in more or less good taste, on the Covid.
Passionate about bridge, she started playing online “every evening for at least two hours”. Next step: download the app from your bank to pay using your mobile. “I have never been attracted to the Internet,” explains the bubbly retiree. But I have to admit that I got caught up in the game. ” We can see that!
When not typing on a tablet or computer keyboard, she is playing her favorite sport, golf. Involved in an association supporting people at the end of their life, she created a foundation, under the aegis of the Fondation de France, to finance this voluntary activity and other causes dear to her. After a brilliant career in insurance which sheltered her from want, she intends to enjoy life while financially supporting the most disadvantaged.
She contacted us to help her put her heritage at the service of her new life as a young retiree. Woman of figures, interested for a long time in the management of her personal finances, she has applied, with success, for years, the precepts of Returned, starting with the sacrosanct diversification.
With more than 7,000 euros in pension per month (including the pension paid under an old article 83), she does not need additional resources. The optimization of income tax is not a priority subject in his eyes either. His main objective is to optimize the transmission of his property to his nephews and nieces. To provide them with personalized answers to their wealth concerns, we analyzed their income, expenses, assets and debts.
Conclusion : solutions exist to “disinherit” the tax authorities, but decisions must be taken. Quickly.
Recommendation n ° 1: transmit while alive
Beatrice is right to anticipate her succession. Because without special precautions, his nephews and nieces would have to pay 55% of rights beyond a reduction limited for each to 7,967 euros. To avoid such a drain on her savings, the fruit of a lifetime of work, she could start by spoiling her loved ones on Christmas and their birthdays.
These gifts (“customary gifts” in the jargon of tax specialists) are not taxable provided they are modest in relation to the income and the importance of the patrimony of the person who makes them. There is no law specifying the amount of what can be given. “Case law considers that the amount of the present of use must not exceed 1 to 2% of the patrimony, nor 2.5% of the annual income of the donor,” explains Avy Amiel, private manager at La Financière de l’Échiquier.
Beatrice could supplement by donations in due form by taking over the donation rights normally due by the donee (nephew or niece), as the legislator authorizes it. As this additional gift is not itself taxed, this makes it possible to significantly lower the levy rate.
Recommendation n ° 2: joint property purchase
She could also invest in stone with her nephews and nieces. The assembly is complex and requires precautions to avoid being requalified as a donation, but it can present a powerful tax leverage. Béatrice has dreamed for years of a beautiful seaside villa in Dinard, where she has family ties.
She could afford it, but the property would be heavily taxed in the event of inheritance. The trick: the dismemberment of property. She would buy the usufruct of a house to renovate and the nephew to whom she is closest and who has substantial financial means, bare ownership.
Advantage: as a usufructuary, it could carry out important works. Thus, upon his death, his nephew would inherit more valuable property without paying one euro in additional rights. We advise Béatrice to make an appointment with her lawyer. The operation must be set up with care to avoid any risk of tax adjustment.
Recommendation n ° 3: use life insurance
She must of course keep enough to live comfortably until the end. At 65, the life expectancy of a female executive is around thirty years. It remains to best invest the capital that it wishes to keep. To invest, at age 65, in attractive tax conditions both in terms of earnings and in the event of the disappearance of the insured, life insurance remains unmatched.
Recall: the preferred financial investment of the French is out of succession. This means that the death benefits do not go to your heirs within the meaning of the Civil Code, but to the persons named in the beneficiary clause.
From a fiscal point of view, each beneficiary is exempt from tax up to 152,500 euros and beyond that the rate of deduction never exceeds 31.25%, i.e. 23.75 percentage points less than in the context of an inheritance. classic between an aunt and her nephews and nieces (55%). On condition, to feed life contracts before 70 years. It therefore has five years ahead of it to reorganize its financial investments by favoring life insurance.
We recommend that they take out contracts awarded by Income and opt for a 60 – 40 allocation: 60% in secure euro funds, 40% in stock market funds invested in international equities. For each Trophées d’Or contract of Returned, each year, in the April issue, we publish the list of funds to be subscribed and in what proportion.
Beatrice thanks Income for the wealth analysis and our invaluable advice on tax exemption. She undertakes to keep us informed of the decisions taken following our exchanges by videoconference.
Lessons to be drawn from this heritage study
Without special provision, inheritances between an aunt or an uncle and his nephews and nieces are taxed at 55% after an allowance limited to 7,967 euros.
The tax administration authorizes donors (people who give) to pay the donation rights normally due by the donees.
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