PER: tax bonus by transferring your life insurance

If you have a life insurance contract for more than 8 years and want to benefit from an increased tax credit, you only have one month left to transfer it to a pension savings account (PER).

Deadline for transferring your old life insurance contract to a pension savings (ABOUT) on favorable terms. Within the framework of the Covenants Act, redemption of amounts placed on a life insurance contract against a PER gives the right to a tax deduction on capital gains, multiplied by two. Specifically, a single saver will be able to earn up to 9,200 euros in earnings without being taxed and up to 18,400 euros for a couple.

As a reminder, every life insurance contract over 8 years already enjoys a tax deduction on capital gains on redemption. It is between 4,600 euros per year for a single person and up to 9,200 euros for a couple.

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3 conditions to meet to benefit from it

However, to benefit from the increase system until 31 December 2022, you must meet a few conditions. First, your contract must be open for more than 8 years. On the other hand, you must be more than 5 years from the retirement age set at 62, i.e. no more than 57 years old. Finally, you are required to reinvest all the amounts on your life insurance against your PER. Thus, it is impossible to place only one part and recover another. Good to know, transferring to a PER is considered a voluntary payment. This means that you are entitled to another tax benefit: a tax reduction. You can thus, subject to conditions, deduct the amounts transferred to your PER from your taxable income and at the same time reduce your tax. Be careful though, because of the time it takes to redeem life insurance contracts, it is advisable not to wait too long to transfer to a PER.

Very different products

Furthermore, unlike life insurance, it is only possible to release the amounts invested in your PER before retirement under certain conditions: purchase of a main residence, death of the spouse or PACS partner, a situation of disability or excessive indebtedness, expiry of rights to unemployment insurance or during a judicial liquidation.

Similarly, the taxation of exiting a life insurance contract or a PER is different. In the case of life insurance, only interest is taxed on withdrawal (and you still benefit from the annual tax credit). On the side of PER, since you benefit from a tax reduction under voluntary payments, the amounts at the time of retirement will be taxable.

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