Social contributions on unit-linked life insurance contracts: rejection of the appeal by the Paris Administrative Court of Appeal.

Context and stakes of this new judicial decision

The Paris Administrative Court of Appeal has just rejected the appeal concerning social contributions on unit-linked life insurance contracts that are settled upon death (CAA Paris, March 6, 2025, No. 223PA000962). The debate primarily revolved around the legal identity of the person liable for these social contributions, given that life insurance is based on a tripartite relationship: the policyholder (the one who signs the contract), the insurer, and the beneficiary of the contract.

Indeed, current law does not clearly designate the party responsible for paying the social contributions in this particular context. The Administrative Court of Appeal, despite the questions raised during the judgment, merely provided a minimalist rationale to confirm the policyholder's status as the debtor of the social contributions.

A controversial decision with significant legal consequences

This decision is particularly surprising due to its reasoning, which is deemed insufficiently substantiated: it simply refers to "the economy of the regime" without clearly explaining the legal justification for a deceased policyholder becoming liable for the social contributions generated by their own death.

This legal ambiguity could have serious practical consequences for the heirs and beneficiaries of life insurance contracts. If the deceased is considered liable for the social contributions, then these amounts should logically be deducted from the estate subject to inheritance tax, thereby reducing their tax burden.

What are the next steps for this complex case?

In light of this rejection on appeal, the next legal step is anticipated before the Council of State. The latter will be responsible for either providing the necessary legal clarification or directly referring the matter to the Constitutional Council via a Priority Question of Constitutionality (QPC).

In the event of failure before the Council of State, the case could even be brought before the European Court of Human Rights, so that beneficiaries of life insurance contracts can enjoy a tax situation that is fair and compliant with the fundamental European rights guaranteed by the European Convention on Human Rights.

To be continued…