The French tax authorities have commented the new rules introduced by the Finance Act for 2013 (article 13 of Law n° 2012-1509 dated 29 December 2012), in particular:

  • Change of the applicable wealth tax rates (return to the old progressive scale);
  • Wealth tax capping mechanism to 75% of the taxpayer's income;
  • Limitation of the deductible liability to the sole debts related to the taxable assets on behalf of the debtor.

It is important to note that despite the censorship of the French Constitutional Council, the French tax authorities have indicated that the taxpayer has to include changes in the value of life insurance contracts in the income, when calculating the wealth tax cap (notably BOI-PAT-ISF-40-60- 20130614 dated 14 June 2013).