A life insurance or capitalisation contract taken out with an insurer established outside France is not prohibited for a French tax resident. It is, however, subject to a specific reporting obligation: every year, together with the income tax return, the contract must in principle be reported to the tax authorities, like bank accounts held abroad.
This article explains which contracts are concerned, how to report them, how their proceeds are taxed in France and what may happen if they are forgotten. As every situation is different, in particular where earlier years were not reported, an analysis with a lawyer is generally useful.
In brief
- Life insurance or capitalisation contracts taken out with bodies established outside France must in principle be reported every year by French tax residents (article 1649 AA of the French General Tax Code).
- Reporting is, in principle, done by ticking box 8TT of return no. 2042 and completing form no. 3916-3916 bis.
- It covers in particular the contract references, the premiums paid and surrenders during the year and the surrender value on 1 January.
- Failure to report is in principle punishable by a fine of €1,500 per contract and per year (€10,000 in certain States), and the reassessment period is in principle extended to ten years.
- Foreign insurers generally pass information on to France under the automatic exchange of information.
Contents
Which contracts are concerned?
The obligation covers, as a general rule, capitalisation contracts and similar investments, in particular life insurance contracts, taken out with insurance or similar bodies established outside France. It in principle applies to individuals tax-domiciled in France.
It concerns, in principle, both a contract taken out during a period of residence abroad and kept after moving to France and a contract taken out from France with a foreign insurer. The reporting covers the subscription, amendments and the total or partial termination of the contract.
How is the contract reported?
The contract is in principle reported every year together with the income tax return, by ticking box 8TT of return no. 2042 and completing form no. 3916-3916 bis. For each contract, the return states in particular:
- the identity of the policyholder: surname, first name, address, date and place of birth;
- the name and address of the insurance body and, where applicable, of the branch providing the cover;
- the name of the contract, its references and the nature of the risks covered;
- the effective date and term of the contract;
- the effective dates of amendments and of total or partial termination transactions during the year;
- premiums paid and repayments (surrenders) made during the previous year;
- where applicable, the surrender value or the amount of the guaranteed capital, including in the form of an annuity, on 1 January of the year of the return.
The guide to form 3916 presents the form step by step. Where the tax authorities have already received information on the contract, box 8TT may appear pre-ticked: the article on pre-ticked boxes 8UU or 8TT explains what this means.
An example
Claire moves to France in 2024 and keeps a life insurance contract taken out with an insurer established outside France when she lived abroad. In 2025, she pays €500,000 into the contract and makes no surrender. When filing her 2025 income tax return, in spring 2026, she in principle ticks box 8TT and reports the contract on form no. 3916-3916 bis, stating in particular the €500,000 payment and the surrender value of the contract on 1 January 2026. This report is in principle renewed every year for as long as she holds the contract.
How are the contract’s proceeds taxed?
For a French tax resident, the proceeds of a contract taken out abroad (the part of the amounts surrendered that corresponds to gains) are in principle taxable in France on surrender or termination of the contract, under the rules applicable to life insurance. As foreign insurers do not always apply the deductions provided for French contracts, it is in principle for the taxpayer to report these proceeds. On the death of the insured person, the sums paid to the beneficiaries in principle fall under the French tax rules specific to life insurance, depending on the domicile of the insured person and the beneficiaries, subject to tax treaties. The regime applicable to a given contract deserves to be checked with a lawyer.
How to calculate the taxable part of a surrender, the applicable rates and form 2778 are explained, with two worked examples, in the article surrender of a foreign life insurance policy: how France taxes the gains.
What are the risks if the contract is forgotten?
The main consequences of an unreported contract are summarised below:
| Consequence | In principle | Provision |
|---|---|---|
| Fine for failure to report | €1,500 per contract and per year, increased to €10,000 where the body is established in a State that has not concluded an administrative assistance agreement with France | Article 1766 of the CGI |
| Surcharge on tax reassessed on undeclared assets | 80% | Article 1729-0 A of the CGI |
| Reassessment period for income tax | Extended to ten years, subject to exceptions | Article L169 of the LPF |
These penalties are detailed in the article on fines for not reporting a foreign account, and the time limits in the article on limitation periods. Where contracts have not been reported, a regularisation may, depending on the case, be considered; whether to proceed deserves to be examined with a lawyer.
Are the tax authorities informed?
In many cases, yes. Life insurance contracts with a surrender value fall within the scope of the automatic exchange of information (CRS): information on them is generally sent every year to the French tax authorities where the policyholder is a French tax resident.
What I see in my cases
Life insurance policies are, along with securities accounts and retirement accounts, among the foreign accounts most often forgotten in my cases: in short, they are the accounts holding a lot of money. They are almost always discovered through a letter from the tax authorities, informed by the automatic exchange of information; as with other accounts, the question of the origin of the funds is then often at the heart of the exchanges.
FAQ
Is a contract taken out before moving to France concerned?
In principle yes: the obligation covers contracts held by a French tax resident with a body established outside France, whatever the date of subscription.
Is the reporting annual?
In principle yes: the contract is reported every year with the income tax return, for as long as it is held, including the year in which it ends.
Is a contract taken out with the French branch of a foreign insurer concerned?
The obligation covers bodies established outside France; the situation of a contract taken out with a branch established in France deserves to be checked case by case.
What happens if the contract has never been reported?
A fine of €1,500 per contract and per year is in principle incurred (€10,000 in certain States), within the limitation periods, and the tax reassessed may be increased by 80%. Whether to regularise deserves to be examined with a lawyer.
Are the gains on a foreign contract taxed every year?
In principle no: they are taxable on surrender or termination of the contract. The contract itself, however, is in principle reported every year.
