Wealth & Transmission practice, International life insurance

Life insurance and international transmission: the territoriality of Article 990 I

The levy under Article 990 I of the French Tax Code applies to death benefits arising from premiums paid before the insured reached the age of 70. In an international context, its territoriality rests on two alternative criteria: the levy applies where the insured was a French tax resident at the time of death, or where the beneficiary is a French tax resident at that time and has been for at least six of the ten years preceding the death. The place where the policy was taken out and its nationality, whether French or Luxembourg, have no bearing on this connecting factor. The firm analyses each situation in light of the parties' residence, the applicable tax treaty and the structuring of the policy.

Review an international transmission The firm's expertise
Paris · Geneva · Marseille · Cannes · Lisbon
— 01

The territoriality of Article 990 I in an international context

Article 990 I of the French Tax Code establishes a standalone levy, distinct from inheritance duties, on the sums paid by insurance undertakings upon the death of the insured. This levy targets the capital corresponding to premiums paid before the insured's seventieth birthday. After an allowance of 152,500 euros per beneficiary, it applies at a rate of 20 percent up to 700,000 euros, then 31.25 percent above that threshold. Premiums paid after the age of 70 fall under a separate regime set out in Article 757 B of the French Tax Code.

The question of territoriality arises as soon as a foreign element is present: an expatriate insured, a beneficiary resident abroad, a policy taken out outside France. Article 990 I, I sets out two alternative connecting criteria. The levy applies, first, where the insured is a French tax resident within the meaning of Article 4 B of the French Tax Code on the date of death. It also applies where the beneficiary is a French tax resident within the meaning of the same Article 4 B on the date of death and has been for at least six of the ten years preceding the death. It is sufficient for one of these two criteria to be met for the levy to be due.

This mechanism calls for a precise reading. The residence of the policyholder at the date of subscription, like the beneficiary's domicile at the date the funds are paid, is irrelevant: only the situation on the date of death matters. A beneficiary who has been settled in France for less than six years therefore escapes the levy if the insured was a non-resident. Conversely, a Luxembourg policy taken out by an insured who remained a French resident stays within the scope of Article 990 I. The firm deliberately limits the number of engagements it accepts, so that the partners remain directly involved in every matter.

— 02

Our areas of intervention

01

Characterising territoriality

The application of Article 990 I depends on the residence of the insured and of the beneficiary on the date of death. The precise characterisation of their tax residence determines whether the levy is due.

  • Analysis of the insured's tax residence within the meaning of art. 4 B of the French Tax Code
  • Counting the six-out-of-ten-years rule for the beneficiary
  • Determination of the applicable connecting criterion (insured or beneficiary)
  • Handling of dual-residence situations and recent expatriations
  • Coordination with the taxation of non-residents
02

Premiums before and after age 70

The applicable regime depends on the insured's age when the premiums were paid. The dividing line between Article 990 I and Article 757 B structures the entire analysis of the transmission.

  • Allocation of premiums paid before age 70 falling under art. 990 I
  • Treatment of premiums paid after age 70 under art. 757 B (inheritance duties on the fraction exceeding 30,500 euros)
  • Application of the 152,500-euro allowance per beneficiary
  • Calculation of the 20 and 31.25 percent rates according to the thresholds
  • Optimising the timing of premium payments
03

International tax treaties

The Article 990 I levy does not always fall within the scope of inheritance tax treaties. Its interaction with the foreign taxation of the beneficiary must be assessed on a case-by-case basis.

  • Review of the nature of the levy and its inclusion in inheritance tax treaties
  • Identification of double taxation risks with the beneficiary's State of residence
  • Analysis of the available relief mechanisms (tax credit, exemption) where applicable
  • Coordination with the applicable foreign inheritance taxation
  • Securing the reporting obligations owed to the insurance undertaking
04

Luxembourg life insurance policies

The Luxembourg policy offers recognised asset protection, without altering the French connecting factor. Taking out such a policy in an international context calls for a specific analysis.

  • Confirmation that the place of subscription is neutral with regard to art. 990 I
  • Application of the French levy where the insured remains a French resident
  • Treatment of the policy upon a transfer of residence of the insured or the beneficiary
  • Coordination with the beneficiary clause and the designation of foreign beneficiaries
  • Coordination with the developments applicable to Luxembourg policies
— Before the courts

Loan secured by a pledged life insurance policy: does the debt remain deductible from the estate?

A loan is often secured by a pledge over a life insurance policy written on the borrower's life. On death, the capital passes to the designated beneficiary, outside the estate (Article L. 132-12 of the French Insurance Code), whereas the loan remains a debt of the deceased. Can that debt be deducted from the estate? Article 768 of the French Tax Code allows the deduction of debts owed by the deceased where their existence on the day the estate opens is duly established. In 2026, two courts of appeal gave opposite answers.

01

Paris, 25 June 2026: the debt is deductible

The deceased had financed a flat with an interest-only (in fine) loan, secured by a pledge over a life insurance policy and by an escrow agreement entrusted to notaries. The loan agreement provided that the loan would not become payable on death. The beneficiary of the policy was not the bank but a legatee, whom the will required to repay the loan. The tax authorities argued that the debt had been extinguished on death through enforcement of the security.

The court held that, where a specific beneficiary is designated, the death benefit does not form part of the estate notwithstanding the pledge, that handing the funds to the escrow agent does not bring them into the creditor's assets, and that the loan ended only upon repayment after the death. The debt therefore existed on the date of death: it is entered as a liability of the estate and the reassessed duties are discharged (Paris Court of Appeal, Division 5, Chamber 10, 25 June 2026, No. 23/11320).

02

Grenoble, 18 February 2026: the debt is disallowed

Having been refused borrower insurance, the deceased had pledged a life insurance policy, up to the amount borrowed, to secure a property loan that became repayable early on death. The court accepted that the outstanding capital was a debt of the estate, but held that the loan and the pledge formed a single overall transaction: the borrower had provided for repayment of the loan, on death, out of the policy.

In the court's words, since an asset offset a liability, the estate did not owe anything to the bank: the deduction was refused (Grenoble Court of Appeal, Family Affairs Chamber, 18 February 2026, No. 24/02684).

03

The Cour de cassation has not ruled

As of 4 November 2026, the firm has not identified on Judilibre any judgment of the Cour de cassation ruling on the deduction of a loan secured by a pledged policy whose beneficiary is someone other than the lender. The Court has only held, in a neighbouring situation, that designating the lender itself as beneficiary of the death benefit amounts to designating a specific beneficiary, and set aside the judgment that had held otherwise (Cass. com., 14 February 1972, No. 69-12.736, published in the Bulletin). The tax authorities infer from this that neither the capital paid to the lender nor the debt thus secured is to be taken into account (BOI-ENR-DMTG-10-40-20-10, § 360).

The two 2026 judgments are appellate decisions, given on different facts: whether the loan was payable on death, who the designated beneficiary was, when repayment took place. Until the Cour de cassation rules, the outcome remains uncertain: it depends on the terms of the loan and of the pledge as much as on the analysis adopted by the court hearing the case.

04

What the firm checks

The beneficiary of the policy: the lender or a relative, and any suspension of the designation in favour of the pledgee, a point noted by the Paris court.

The terms of the loan and of the pledge: acceleration on death, extension of the security to the death benefit, escrow agreement, joint liability of heirs and legatees.

Evidence of the debt on the date of death: a bank certificate stating the outstanding capital and the date of repayment.

The tax regime of the capital itself, to be split between premiums paid after age 70, which fall under Article 757 B, and the other sums, which in principle fall under Article 990 I; the latter levy is due if the insured is tax domiciled in France at death, or if the beneficiary is tax domiciled in France at that date and has been for at least six of the preceding ten years. Both judgments concern only the liabilities of the estate, not the taxation of the capital.

— 03

Lead counsel, Jonathan Bensaid

Founding partner, Jonathan Bensaid leads the firm's wealth and succession practice: life insurance, international transmission, beneficiary clause, dismemberment of ownership and the structuring of Luxembourg policies. He advises families and holders of mobile wealth on the territoriality of the Article 990 I levy, on the Franco-Swiss axis between Paris and Geneva as well as in configurations involving several States of residence. The firm coordinates the parties' residence, the applicable tax treaty and the nature of the policy in order to secure the transmission.

  • Article 990 I of the CGI
  • Territoriality, art. 4 B
  • International life insurance
  • Article 757 B of the CGI
  • Luxembourg policies
  • France · Switzerland
— FAQ

Frequently asked questions

What is the levy under Article 990 I of the French Tax Code?

Article 990 I of the French Tax Code establishes a standalone levy on the capital paid by insurance undertakings upon the death of the insured, in respect of premiums paid before the insured turned 70. After an allowance of 152,500 euros per beneficiary, the levy applies at a rate of 20 percent up to 700,000 euros of taxable capital, then 31.25 percent above that threshold. This levy is distinct from inheritance duties and follows its own territoriality rules.

When does Article 990 I apply in an international situation?

Article 990 I, I sets out two alternative connecting criteria. The levy is due, first, where the insured is a French tax resident, within the meaning of Article 4 B of the French Tax Code, on the date of death. It is also due where the beneficiary is a French tax resident, within the meaning of the same Article 4 B, on the date of death and has been for at least six of the ten years preceding the death. It is sufficient for one of these two criteria to be met for the levy to apply.

How is the six-out-of-ten-years rule counted for the beneficiary?

The criterion relating to the beneficiary involves a twofold condition assessed on the date of the insured's death: the beneficiary must be a French tax resident within the meaning of Article 4 B of the French Tax Code, and must have been for at least six of the last ten years preceding the death. A beneficiary who recently settled in France, present for less than six years, is therefore not liable on this basis, unless the insured was a French resident on the date of death, in which case the first criterion suffices.

Does the place where the policy was taken out affect territoriality?

No. The territoriality of Article 990 I rests exclusively on the residence of the insured and of the beneficiary on the date of death, assessed under Article 4 B of the French Tax Code. The place where the policy was taken out, the nationality of the insurer, or the policyholder's domicile at the date of conclusion, are irrelevant. A Luxembourg policy taken out by an insured who remained a French resident thus remains fully within the scope of the French levy.

What is the difference between Article 990 I and Article 757 B?

The dividing line is the insured's age when the premiums were paid. Capital arising from premiums paid before age 70 falls under the Article 990 I levy, with its allowance of 152,500 euros per beneficiary. Premiums paid after age 70 fall under Article 757 B of the French Tax Code: they are subject to inheritance duties, according to the family relationship, on the fraction exceeding a global allowance of 30,500 euros, while income and interest remain exempt. A single policy may therefore fall under both regimes depending on the dates of payment.

Do tax treaties neutralise the Article 990 I levy?

Not systematically. The Article 990 I levy has a particular nature, distinct from inheritance duties, which raises the question of whether it falls within the scope of inheritance tax treaties. Depending on the wording of the applicable treaty and the characterisation adopted, a risk of double taxation may remain with the beneficiary's State of residence. A case-by-case treaty analysis is essential in order to identify any available relief mechanisms.

Does a Luxembourg policy provide a territoriality advantage?

The Luxembourg policy provides recognised asset protection, notably through its asset segregation regime, but it does not alter the French connecting factor. As long as the insured remains a French resident on the date of death, Article 990 I applies regardless of where the policy is located. The value of such a policy in an international context lies in legal certainty and mobility, not in an exemption from the levy.

Is a loan secured by a pledged life insurance policy deductible from the estate?

Two courts of appeal have answered in opposite ways. The Paris Court of Appeal allows the deduction where the beneficiary of the policy is not the lender and the loan ended only upon repayment after the death (Paris, 25 June 2026, No. 23/11320). The Grenoble Court of Appeal refuses it where the pledged policy had been set up to repay the loan on death, the asset offsetting the liability (Grenoble, 18 February 2026, No. 24/02684). As of 4 November 2026, the firm has not identified any judgment of the Cour de cassation on this question; the terms of the loan, of the pledge and the beneficiary designation drive the analysis.

How can an international life insurance transmission be secured?

Securing the transmission requires a precise mapping of the tax residences of the insured and of each beneficiary, an allocation of the premiums according to whether they were paid before or after age 70, and a rigorous drafting of the beneficiary clause. It also requires reviewing the applicable tax treaty and the reporting obligations incumbent on the insurance undertaking. The firm conducts this analysis upstream, in order to anticipate liability to the Article 990 I levy and to avoid double taxation.

Cité par

An international life insurance transmission to analyse?

A confidential initial conversation, with no commitment. We respond within 24 business hours.

Request a consultation Taxation of non-residents

© BENSAID Avocats, The information on this site does not constitute legal advice.