No insured
The defining difference: no insured, no aleatory element, no beneficiary clause, no insaisissabilité, no hors-succession treatment. The contract enters the estate at death rather than passing outside it.
Gain purge
IR gains accumulated before a full-ownership transmission at death (or by donation) are purged for income tax purposes since the 2018 reform (Loi 2017-1837 art. 28) — eliminating double taxation with succession duty.
Art. 1133
At the usufructuary's death, the consolidation of full ownership in the nu-propriétaire of a capitalisation contract triggers no additional registration duty (CGI Art. 1133) — a key advantage of the bare-ownership donation strategy.

Definition and Comparison with Assurance-Vie

The contrat de capitalisation is classified under branch 24 of the insurance business classification and commercialised by the same insurers as assurance-vie. But it is definitionally distinct: it is a pure capitalisation operation based on specified-term, specified-amount commitments (C. ass. Art. R 321-1). It has no insured person, no randomness linked to human life, and no stipulation pour autrui. A surrender right, an advance facility, and the same investment supports (euro, UC, euro-croissance) are available as in life insurance.

Assurance-Vie Life Insurance Contract
Insured: Yes — death of insured triggers discharge.
Beneficiary clause: Yes — death benefit paid directly to named beneficiary; hors succession.
Insaisissabilité: Yes (with named beneficiary) — C. ass. Art. L 132-14.
At death: Contract discharged; capital paid to beneficiary; specific tax regime (CGI Art. 757 B / 990 I); IR gain purged.
IFI: UC real estate fraction of surrender value.
Démembrement: Legally complex (stipulation pour autrui issue).
Contrat de Capitalisation Capitalisation Contract
Insured: None — no discharge at death; no life-contingency.
Beneficiary clause: None — no hors succession treatment; enters estate.
Insaisissabilité: None — fully seizable by creditors.
At death: Contract continues; heirs receive the contract; succession duty on surrender value; IR gain purged (full-ownership transmission); social charges remain due.
IFI: Same — UC real estate fraction of surrender value.
Démembrement: Cleaner legally — no stipulation pour autrui complication.

Who May Subscribe

Natural persons

Any natural person, adult or minor, may subscribe a contrat de capitalisation. Minors and protected adults require the same powers as for an assurance-vie subscription. The 30-day renunciation right (C. ass. Art. L 132-5-1) applies to natural persons but not to legal persons (CA Paris 25-3-2008).

Legal persons: FFA restrictions

Legal persons may subscribe, but are subject to FFA deontological rules designed to prevent short-term cash management abuse via the fonds euros. Industrial, commercial, and artisanal companies and legal persons subject to corporate tax (IS) are excluded. Permitted subscribers include non-profit organisations, and sociétés civiles (whether IS-subject or not) whose associates are exclusively natural persons or non-IS entities and whose principal activity is managing their own movable or immovable patrimony — with a tolerance for commercial activity below 10% of turnover.

Where permitted, special conditions apply: first-year fonds euros remuneration is only credited at year four, and early partial surrenders reduce the credited remuneration. Luxembourg contracts are not subject to FFA rules and offer an alternative for legal persons excluded under French rules.

Saisissabilité: Fully Exposed to Creditors

C. ass. Art. L 132-14 (the insaisissabilité provision) does not apply to capitalisation contracts. The surrender value is freely seizable by the policyholder's creditors at any time. For wealth protection purposes, this is a significant disadvantage relative to life insurance. The nantissement (pledge) of the contract in favour of a lender is possible and commonly used for in fine property loans.

Rachat: Same CGI Art. 125-0 A Regime

The income tax framework for surrenders and partial withdrawals is identical to that for life insurance (CGI Art. 125-0 A): the taxable gain formula, the historical/new regime split (pre/post 27 September 2017 premiums), the 8-year abatement of €4,600/€9,200, and the PFU/PFL rate structure all apply in the same way. Social charges (17.2%) also apply identically: annually on fonds euros, at surrender on UC.

The 8-year contract age threshold runs from the date of original subscription — not from any subsequent transmission. If a contract subscribed in 2010 is donated in 2024, a 2026 surrender by the donee uses the 2010 subscription date for the tenure calculation.

Death: The Contract Enters the Estate

This is the fundamental distinction from life insurance. At the policyholder's death, the capitalisation contract does not discharge and does not pass outside the estate. The contract itself is an estate asset (Cass. 1ère civ. 18-7-2000; Cass. 1ère civ. 29-1-2002). Heirs or legatees receive the contract (not a capital sum) and may either surrender it or continue it until maturity. Where some heirs wish to continue and others wish to surrender, the contract may end up in indivision, requiring unanimous consent for any surrender.

The taxable base for succession duty is the surrender value at the date of death. No specific social charges are triggered at death (unlike life insurance contracts). Death does not crystallise a social charge liability on the capitalisation contract.

The IR gain purge on transmission

Where the contract is transmitted in full ownership at death (or by a donation with no usufruct reserved), the latent IR gains accumulated before the transmission are purged for income tax purposes. The heir's gain base for a future surrender starts from the value at which they received the contract (i.e., the surrender value declared in the succession). Pre-transmission gains escape IR entirely — though they are indirectly taxed as part of the succession duty base. Social charges previously collected on fonds euros income are not reversed.

This gain purge does not apply where the transmission is a donation of bare ownership with reserved usufruct: only the NP fraction is purged. The usufructuary's fraction remains taxable when they eventually surrender. This asymmetry requires careful modelling before choosing between outright donation and donation with reserved usufruct.

Gain Purge: Before vs After the 2018 Reform

Before the 2018 amendment to CGI Art. 125-0 A, heirs who surrendered after inheriting faced IR on the entire gain since original subscription — a double taxation with succession duty. Since 2018, the acquisition price for IR purposes is the value used for succession duty, eliminating the double taxation on pre-transmission gains. A practical notarial certificate is advisable to document the transmission value clearly for the insurer's records.

Donation of Bare Ownership

A donation of the bare ownership of a capitalisation contract (with usufruct reserved by the donor) is a recognised estate planning technique with three fiscal advantages: succession duty is assessed on the value at the date of donation (not at the later and potentially higher death value); the base is limited to the bare ownership fraction; and the donor (as usufructuary) may pay the donation duties without this being treated as an additional donation. At the usufructuary's death, the consolidation of full ownership in the NP triggers no additional duty (CGI Art. 1133).

However, only the NP fraction's gain is purged at each transmission. And the NP must bear in mind that, unlike a life insurance beneficiary, they receive the contract itself at the consolidation — not a liquid capital sum. They must either continue or surrender the contract.

Subscription in démembrement from the outset (NP and US subscribing jointly) is legally cleaner for capitalisation contracts than for life insurance, because there is no stipulation pour autrui complication. The contractual rights of each party (including management, arbitrages, and any surrender) should be specified in a separate convention.

IFI Treatment

For IFI purposes, the capitalisation contract is treated identically to life insurance: only the fraction of the surrender value representing units of account invested in real estate assets (including real estate funds, SCPI units, OPCI) is included in the IFI base (CGI Art. 972). A pure fonds euros contract has no IFI exposure.

Where the contract is held through a société civile, it is the SC's shares that are in the IFI base — valued at the SC share price, which incorporates the contract's UC real estate fraction. For a company subject to IS holding the contract, IFI applies to the shares at the IS-deferred value of the real estate component.

The Former ISF Nominal Value Advantage

Under the old ISF (wealth tax, replaced by IFI in 2018), a nominative capitalisation contract held directly by a natural person could be declared at its nominal value (total premiums paid) rather than its surrender value — regardless of the investment support. This gave a significant ISF base reduction for contracts in profit. This advantage disappeared with the switch to IFI in 2018, as IFI only catches real estate UC fractions. A pure fonds euros contract remains entirely outside IFI, as under ISF.

For a company subject to IS holding a capitalisation contract, the taxable income each year is determined by a formula: nominal value × 105% of the taux moyen des emprunts d'État (TME) at subscription (CGI Art. 238 septies E). At surrender, the real gain is compared with the cumulated forfeit and a true-up adjustment is made. No social charges apply to IS-subject legal persons.

For a société civile (semi-transparent, non-IS), the contract's income is determined at the SC level under CGI Art. 125-0 A and flows through to associates proportionally to their shareholding, under the associates' personal tax regime.

Key Points: The Contrat de Capitalisation
A contrat de capitalisation is a pure savings instrument (C. ass. Art. R 321-1): no insured, no life-contingency, no stipulation pour autrui, no beneficiary clause, and no insaisissabilité. Issued by the same insurers as assurance-vie with the same investment supports, but fundamentally different in legal character.
The contract is fully seizable by creditors — C. ass. Art. L 132-14 does not apply. For wealth protection purposes, this is a significant disadvantage relative to life insurance with a named beneficiary.
At the policyholder's death, the contract does not discharge — it enters the estate and heirs receive the contract itself (not a capital payment). Succession duty is assessed on the surrender value at death. No specific social charges are triggered at death.
Since the 2018 reform (Loi 2017-1837 art. 28), IR gains accumulated before a full-ownership transmission are purged: the heir's gain base starts from the succession value, eliminating double taxation with succession duty. This purge does not occur for a donation with reserved usufruct — only the NP fraction is purged.
The rachat (surrender) income tax framework is identical to life insurance: CGI Art. 125-0 A, the 8-year abatement of €4,600/€9,200, and the PFU/PFL rates all apply in the same way. The 8-year clock runs from the original subscription date — not from any subsequent donation or inheritance.
Donation of bare ownership (with usufruct reserved): succession duty on the donation at reduced (bare ownership) value; at the usufructuary's death, consolidation of full ownership triggers no additional duty (CGI Art. 1133). Subscription in démembrement from the outset is legally cleaner than for life insurance — no stipulation pour autrui complication.
IFI treatment is identical to life insurance: only the UC real estate fraction of the surrender value is in the IFI base (CGI Art. 972). A pure fonds euros contract has no IFI exposure. Under the former ISF, nominative capitalisation contracts could be declared at nominal value — that advantage disappeared when ISF was replaced by IFI in 2018.
Legal persons may subscribe subject to FFA deontological rules: industrial, commercial, and IS-subject companies are excluded. Permitted subscribers include non-profits and sociétés civiles managing their own patrimony with commercial activity below 10% of turnover. Luxembourg contracts are not subject to FFA rules and offer an alternative for excluded legal persons.
Considering a Contrat de Capitalisation for Wealth or Succession Planning?

Our French law practice advises individuals, families and sociétés civiles on the optimal allocation between assurance-vie and contrat de capitalisation, bare-ownership donation structures, and IFI compliance.

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This article is provided for general informational purposes only and does not constitute legal advice. The rules governing capitalisation contracts, particularly the FFA deontological restrictions for legal persons and the tax treatment of demembered contracts, evolve frequently. Consult a qualified French adviser before subscribing or structuring a capitalisation contract.