The French state makes a move towards appropriating
sleeping bank accounts and Life insurance policies.
The Caisse des dépôts et consignations (CDC) is an
elderly, but revamped, French public law institution which acts as
a quasi-state depositary, inter alia for money which is unclaimed
or subject to dispute. It is also used by notaries as a non
interest bearing client account facility, as the money on
non-interest bearing account with this elderly lady is not
technically subject to bad debt write downs or other banking
erosion, saving monetary erosion created by the Banque de
France.
The Law n° 2014-617 of 13th June 2014 (JO 15) requires that, as
from 1st January, 2016, the balances of inactive bank accounts and
sums outstanding on Life insurance policies or bond capitalisation
contracts which remain unclaimed be transferred to the CDC (Loi
art. 1er et 4).
Whilst the law is not specified to apply to contrats de
prévoyance, which do not involve any form of saving and which are
outside the scope of succession duty, their continued availability
on an account with an insurer might render these liable to slip
into the system, and therefore change tax régimes, in the event
that the insurer decides that it can't find the beneficiary.
Article 6 of the law sets out the taxation procedure for the
sums transferred to the CDC. The amounts are taxed on their payment
out to the beneficiaries who present themselves. In other words,
there will be a far stricter procedure here than usual.
Those deploying French Tontine insurance, which combine bons de
capitalisation and prévoyance insurance for death in mid term, need
to be attentive here, and to ensure that the insurer has the
correct details for the insurance beneficiary and also for the
beneficiary under the tontine association.
The benefits for the French Treasury? The CDC effectively blocks
the capital within the French banking system directly under the
auspices of the Banque de France, which does not have to pay
interest back on these amounts in return for the Caisse not being
at risk of default.
In the event that the amounts remain unclaimed for a period of
20 (abandoned bank acounts or life insurance / caoitalisation
bonds) or 27 years where the holders have died; the money
becomes the property of the French State.
A form of two stage expropriation for the unsuspecting
foreigner. Anyone leaving France with a French life insurance
contract or other arrangement falling within this category needs to
ensure that these issues are addressed, if they do not want the
French State to appropriate it.
These provisions come into force on 1st January,
2016