After the age of 60, it is customary to say that it is no longer possible to use tax exemption solutions to reduce taxes and increase income which often tends to drop, especially once one's working life is over. In fact, there is nothing. It is indeed always possible for seniors to have recourse to tax exemption solutions whether through savings products, investments in real estate, in companies, thanks to donations during their lifetime or even the employment of a home-based employee, for example. Overview of the main tax exemption solutions for seniors.
Many people think that it is no longer possible to increase your income by reducing your taxes after a certain age. However, a senior of 60, 70 or 80 years old always has the opportunity to benefit from tax exemptions, in particular thanks to savings products such as life insurance or the equity savings plan (PEA), for example. As proof, according to 2018 data from INSEE, 46% of people aged 70 and over and 42% of people aged 60-69, compared to a third of French people of all ages, have life insurance, a good tax exemption product.
Life insurance, the preferred savings product of the French, is a contract which commits an insurer to pay an annuity or capital to an insured person or to one or more persons designated in advance, in return for payment by the subscriber of sums of money, called premiums. The capital due at the end of the life insurance contract is equivalent to the premiums paid revalued in relation to an interest rate defined in the contract. These premiums can be paid by the insured all at once when the contract is opened, in the form of regular payments (monthly, quarterly or annual) or in the form of payments at free intervals.
The earlier a life insurance contract is signed, the higher the capital paid out at the end of the contract. However, life insurance remains one of the most attractive investments, even for seniors who want to invest their money later.
Even if taxation is not very favorable in the event of withdrawals of money before the end of the life insurance contract, this savings product nevertheless makes it possible to release cash to finance a specific project such as moving in in a retirement home for seniors.
Even with age, investing in real estate remains a good tax exemption solution, especially for seniors who have substantial savings. Indeed, acquiring a property most often requires benefiting from at least 100,000 euros to invest.
There are different tax systems for this type of investment that allow you to benefit from tax reductions. Let us cite for example the non-professional furnished rental regime (LMNP) which consists of acquiring a property and renting it furnished. This device gives the possibility of paying no tax on rental income.
Two other main regimes also reduce taxes on real estate, the “Pinel” and the “Denormandie”. The first device is aimed at people who have made a real estate investment in new construction with the aim of renting their property. They benefit from a tax reduction if their property meets energy performance level conditions and if the rent applied does not exceed a certain ceiling. The "Denormandie" is a tax exemption system that concerns real estate investment in the old. It allows you to benefit from a tax reduction of up to 6,000 euros per year.
For seniors who have cash or savings and who want to invest them to pay less tax, it is also possible to invest their money in companies. Interesting tax exemption solutions are indeed possible by investing in companies that the State wishes to support such as SMEs, companies located overseas ("Girardin" scheme), in the audiovisual sector or in the forests for example.
Direct investment in SMEs notably reduces income tax by 18% of the amount invested, with a ceiling of 9,000 euros for a single person and 18,000 euros for a couple.
In order to benefit from advantages and limit inheritance rights, seniors can resort to donations during their lifetime. The latter give the right to tax deductions which are very interesting. As the Observatory of Inequalities points out, “the French tax system allows a couple to pass on 400,000 euros in inheritance to their two children without the latter having to pay inheritance tax. And even more than a million euros for those who make donations during their lifetime, offer gifts or invest their money in life insurance. As a result, three-quarters of inheritances are exempt ”.
Other tax exemption solutions are available to seniors even if they do not have very substantial income. This is the case, for example, for those who employ an employee at home or call on a personal service provided by an association, a company or an approved body for meal deliveries, assistance in daily living , cleaning, etc. These people can benefit from a tax credit amounting to 50% of the expenses generated by these services.
Carrying out certain types of work in your home, particularly in terms of energy saving, can also reduce your taxes. This work entitles you to an energy transition tax credit (CITE), the amount of which can be up to 75% of the cost of these developments.
