2023-04-30 06:00:21
When you withdraw money from life insurance, only the interest portion is taxable (with an allowance, in some cases). For a contract in losses, can we end up with negative interest, tax deductible from other income, when declaring income? No.
However, this is not a good reason to end your contract in losses. It is not intuitive, but it is even the opposite: it is better to pay back on the contract in losses than to subscribe to a new one.
Because on a contract in losses, we have a “reservoir of capital gains” not taxable. If your new payment produces interest, this capital gain will be, for tax purposes, crushed “in proportion” to the previous capital loss. Conversely, if the amount is paid into a new contract, any interest may be imposed if the saver withdraws it from his contract.
Namely: a new tax opportunity was born two years ago. If you have recorded a loss on a capitalization contract, the little-known cousin of life insurance, you can materialize it by bringing this contract to a company, for example to a civil family real estate company. The capital loss then becomes tax deductible for five years on income of the same nature… for example, gains resulting from a withdrawal from a life insurance contract.
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