France's 2027 Budget: The Proposed Life Insurance and Apport-Cession Changes Expats Should Watch
France's draft budget for 2027 (the projet de loi de finances, or PLF 2027) was tabled on 1 October 2026 and is now going through Parliament. It contains two proposals that matter for expats with wealth structured in France: a tightening of the life insurance regime, and the end of a long-standing capital-gains break on apport-cession. Both are still proposals, so nothing below is settled law, the text can be changed, watered down or dropped during the debates. But they're worth understanding now, because some of the effective dates are backdated to 1 October 2026.
1. Life insurance: new conditions to keep the favourable regime
Life insurance is the backbone of wealth planning in France, and for many expats a Luxembourg or other foreign policy sits at the centre of their structure. The PLF 2027 would make the favourable tax treatment conditional on three requirements:
Premiums paid in cash. Contributions would have to be made in cash (en numéraire), rather than by contributing assets.
Eligible underlying assets. The reference assets would have to meet characteristics equivalent to those required of contracts governed by the French insurance code.
Restrictions on dedicated funds. Dedicated funds (fonds dédiés) could no longer hold securities issued by the policyholder, the insured or the beneficiary, their family circle, or entities they control.
What happens if a contract doesn't comply? It would lose the two things that make life insurance attractive: the annual allowance (€4,600 for a single person, €9,200 for a couple) and the reduced 7.5% rate after eight years. Gains would instead face the 12.8% flat levy (with the option of the progressive scale), and on death the capital would fall under ordinary succession rules rather than life insurance's own regime.
Does this hit foreign contracts? Yes, the text targets contracts taken out with foreign insurers, and would require them to meet similar criteria to keep the French regime. It doesn't single out Luxembourg by name, but Luxembourg policies are exactly the kind of foreign contract in scope. If you hold one, this is the proposal to follow most closely.
Effective dates. For income tax, it would apply to contracts taken out from 1 October 2026, and, for older contracts, to gains from premiums paid from that date. For inheritance tax, to deaths from 1 July 2027.
2. Apport-cession: the end of the "wipe-out on death" break
This one is more niche, but important for business owners who've sold a company through a holding. Under the apport-cession mechanism (Article 150-0 B ter), the capital gain put into tax deferral when you contribute your shares to a holding is currently wiped out for good if those shares are later passed on by gift or inheritance.
The PLF 2027 would end that. A gift or transfer on death of the shares would instead make the deferred gain immediately payable, income tax and social charges included. The proposed rule would apply to transfers made from 1 October 2026.
In plain terms: a strategy that many have used to pass on a holding tax-free would stop working, and the deferred tax that was expected to disappear would come due at the moment of transmission.
Why expats in particular should pay attention
If you're a French tax resident, both measures reach you. The life insurance change applies to your foreign policy just as it would to a French one, and if your wealth planning assumed a Luxembourg contract would keep the French regime, that assumption now needs checking. The apport-cession change matters if you built, or inherited, a holding structure before moving, or plan to pass one on.
Because several effective dates are already set at 1 October 2026, waiting for the final vote before understanding your exposure could leave you caught by a rule that, once passed, reaches back to this autumn.
The takeaway
Nothing here is final, the PLF 2027 is a proposal in a politically fragile Parliament, and the details may shift before any vote. But two threads are worth watching if you have wealth structured in France: whether your life insurance, especially a foreign policy, still meets the conditions to keep its regime, and, if you hold a holding company, how the apport-cession change affects your transmission plans. This is a moment to take stock, not to act hastily on a text that isn't law yet.
Living in France and want to understand how the 2027 budget could affect your wealth?
If you are an expatriate living in France and want to review how the proposed life insurance or apport-cession changes might affect your policy, your structure and your long-term plans, you can book a free introductory call to discuss your situation and identify the key points that should be checked.
Disclaimer: This article is for general information and educational purposes only. It describes proposals in the draft 2027 Finance Bill, which are not adopted law and may change. It is based primarily on official French government sources and other trusted references, and does not constitute personalised tax, legal or financial advice. Tax outcomes depend on individual circumstances and the structures concerned.
