Taxes on inheritance and life insurance: a big mess

More than1.9 trillion euros were invested in life insurance.

And too many recipients face absurd situations when receiving their hard-earned money. Unavailable services, unacceptable deadlines, malfunctions... Taxpayers find themselves tangled in a maze from which they struggle to find a way out.

The funds are blocked during the calculation of inheritance rights.

The issue of delays in processing partial inheritance tax returns is not new. Although the law sets a maximum timeframe within which the insurer must pay the funds to the beneficiary, there is nothing in place to enforce a prompt response to a partial tax return prior to the disbursement of funds. And this is where the problems begin.

To receive the funds invested in life insurance, the beneficiary must first submit a partial inheritance tax declaration. A notary can handle this formal requirement, but often the initiative to contact the insurer is taken by the beneficiary of the contract themselves. After confirming their identity, the insurer sends them a Cerfa form, which specifies the amount of capital and the dates of contributions from the person who signed the contract.

This document must be sent to the Registration Service (SDE) of the deceased's place of residence so that the tax authority can calculate any potential inheritance taxes that the recipient will have to pay.

Moreover, insurance companies often calculate inheritance taxes on the capital so that the beneficiary does not have to pay them in advance and only receives the remaining amount. Taxpayers are not treated equally in terms of deadlines and accessibility. Each SDE operates according to its own rules, and it must be said that this is in accordance with its capabilities.

Staff shortage in SDE

Apparently, the main issue for taxpayers is the processing time for documents. The quality of public services seems to have deteriorated... This is evidenced by the story of a resident of Marseille who traveled 650 km to Bordeaux only to find out that a simple certificate of absence of inheritance taxes, required to access the capital accumulated by his late mother, took more than 3 months to obtain. "Whereas in 2015, when my father passed away, I was issued this document immediately," he recounts.