PEA, booklets, life insurance... What the flat tax is going to change for your savings

This sample at the single rate of 30% will hit the financial investments and life insurance. The taxpayer may, however, avoid it or, on the contrary, benefit from them.

in Parallel to the reform of the wealth tax, which now is applied only to immovable heritage, the government created a sample one-time lump sum (PFU) of 30 % on capital income, effective from 1 January 2018. Objective: to harmonise and simplify the taxation of the whole of such income.

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Livret A, livret d'épargne populaire, LDD... spared

Attention, all the products are not affected: the livret A, livret d'épargne populaire, livret jeune and livret sustainable and inclusive development will retain their current exemption. On the other hand, those who are subject to the progressive scale of income tax or final withholding tax are: booklet B, term accounts, savings books... The taxation will be much more streamlined (except for the taxpayers very weakly charged) than the increase of the CSG rate of social contributions to 17.2% in the first January next.

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To the savings plans housing, the flat tax will apply to interest plans starting on or after 1 January 2018. Before this date, the interests of the twelve first years of the plan are exempt - but those of the following years there will be submitted.

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This rule also pertains to company savings plans, savings plans in shares and savings plans for retirement.

The flat tax will hit also the income shares, dividends, but the taxpayer may opt for the progressive rate of income tax plus social contributions, either to the new tax, the more interesting it is taxed at 30% or more.

life insurance on a case-by-case

The flat tax will finally have life insurance, but not all contracts are only referred to payments made after 27 September 2017 (date of application of the reform), and beyond 150 000 eur total outstanding amount (eur 300 000 for a couple), all contracts combined. The taxation regime current is maintained for the stock lower, with the levies of the "safe harbor" or the income tax, at the option of the investor. Of the same are maintained in the reductions of 4 600 € (9 € 200 for a couple) on withdrawals made after eight years.

so much for the broad lines. The flat tax will be calculated on the net amounts collected, or on the gross amounts before management fees ? Many unanswered questions remain on the practical arrangements which will only be known at the end of the year, once the finance bill is finally adopted.

The new tax by the numbers

• 30%: the single rate of the new tax, including social contributions.

• 200 000 euros: the average outstanding amount of a life insurance contract of the people most wealthy.

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• 1.3 billion: what this tax would cost the State.