How to declare a UK Prudential Assurance Vie withdrawal - Tax declaration example

• Prudential's "International Prudence Bond" is a UK-administered product designed to sit inside the French Assurance Vie wrapper — but Prudential isn't a French insurer, so the paperwork you get doesn't look like what a French provider would send you
• You are taxed on the gain, not the withdrawal amount — but you still have to identify which figure on Prudential's letter is the gain, and where it goes
• If Prudential withholds tax at the point of withdrawal, it withholds the standard rate — it has no way of knowing whether you hold a UK S1 certificate, which changes your actual liability
• Joint policies split the gain 50/50 by default — and if only one holder has an S1, each half is taxed under a different regime
• If too much was withheld, it isn't lost — it's reconciled (and refunded, where due) through your tax return, not through Prudential

Why the UK Prudential Assurance Vie declaration is different

When making a withdrawal from an Assurance Vie with a French provider like AXA, Generali the providers issue an IFU statement. It shows the taxable gain, references the right regime, and often tells you which box to enter the figures into.

The Prudential International Prudence Bond is different. Although a genuine Assurance Vie for French tax purposes - the tax certificate is issued by Prudential International out of Ireland and as such there are no references to French box numbers. For more on why UK expats choose a product like this — and how it compares to a French or Luxembourg contract — see How to Hold an Assurance Vie in Sterling.

This article works through a real case: an actual partial withdrawal, an actual Prudential tax statement, and the actual French declaration built from it — including what changes if the policyholder holds an S1, and what to do if too much tax was taken at source.

A worked example

A policyholder requested a partial cash-in of €50,000 from her International Prudence Bond on 18 November 2025. The bond had been running since 3 January 2019 — just under 7 years old, so under the 8-year threshold (for the tax allowance available after 8 years, see SIPPs vs Assurance Vie: Which Is Better for UK Expats in France?). All premiums were paid after 27 September 2017.

Two things arrived from Prudential:

1. A payment confirmation letter, dated 19 November 2025, showing €47,258.61 actually paid — not €50,000.
2. A "French Tax Statement," dated the following February, covering the whole 2025 calendar year, showing total encashments of €50,000 and a total taxable gain of €9,137.97.

Nothing on either document explains the €2,741.39 gap between the €50,000 requested and the €47,258.61 received. This is exactly the kind of thing that makes people assume a fee was charged, or that they've been shortchanged.

They haven't. Here's what actually happened.

Solving the discrepancy: it's tax, not a fee

Prudential's own letter mentions that payments can be made gross or net of French tax, depending on whether a mandate form was signed. In this case, the policyholder had signed the mandate to withhold French tax at source (this mirrors what a French provider would do) — so Prudential withheld tax before paying out.

The full PFU ("flat tax") rate that applies to a bond under 8 years old, with premiums paid after 27 September 2017, is 30%: 12.8% income tax plus 17.2% social charges. Applied to the gain, not the withdrawal:

€50,000 − €2,741.39 = €47,258.61 exactly. The gap is 30% of the gain, withheld at source before payment. Use your own documentation received to establish if the tax was withheld or not. If in doubt, speak to your provider to clarify.

Policy Under 8 years old, no S1

Below shows the calculation of the case discussed above. Because the bond is under 8 years old, there is no income tax allowance applied (the age-based allowance only exists for policies over 8 years).

Policy Over 8 years old, no S1

Same gain, same PFU regime, but now the annual allowance applies: €4,600 for a single person, €9,200 for a couple filing jointly. The allowance reduces the amount subject to income tax only — not social charges (unless the policyholder has an S1, see below).

Policy Under or Over 8 years old, with an S1

An S1 certificate means you're affiliated to the UK's social security system rather than France's — see our guide to what an S1 does and how to get one if you're not sure whether you hold one. It has no effect on income tax (still 12.8%), but it replaces the 17.2% social charges with the much lower 7.5% prélèvement de solidarité.

Under 8 years, policyholder(s) hold an S1

Same example figures, single policyholder. Because the bond is under 8 years old, no income tax allowance applies here either — only the social charges rate changes.

Over 8 years, policyholder(s) hold an S1

Same gain, but now the bond qualifies for the €4,600 single-person income tax allowance covered above — on top of the reduced 7.5% solidarity levy. The allowance still only ever reduces income tax; the solidarity levy, like standard social charges, applies to the full gain regardless of the allowance.

Joint policy, only one holder has an S1

This is the scenario that causes the most confusion, and it's common: many joint policies were opened by a couple where only one has retired onto a UK State Pension (and therefore an S1) — the other is either not yet at pension age or is French-affiliated for other reasons.

By default, a joint policy's gain is split 50/50 between the two holders. Each holder's S1 status is applied individually to their own 50% of the gain. This example continues to use the same under 8 years old policy, so no income tax allowance applies to either holder's share — that's why the income tax column below is calculated on the full 50% share with no deduction.

Combined household tax: €2,298.20. That's €443.19 less than if neither held an S1, but €443.19 more than if both did. Declaring the whole gain under one regime or the other — instead of splitting it — will produce the wrong figure in both directions.

Note: in the case of a policy over 8 years old, the household's €9,200 couple allowance would apply once against the combined gain (the same mechanic covered above), reducing the total income tax owed across both shares before the S1/non-S1 split is applied. The social charges/solidarity levy columns would be unaffected, since the allowance never reduces those.

How to reclaim tax that was over-withheld

Here's the practical problem: Prudential withheld the standard 30% in this example, because nothing in its process asks whether the policyholder holds an S1. If the policyholder in either scenario above actually qualified for the reduced solidarity rate, Prudential still took the full amount at source.

The excess is not lost, and you don't need to chase Prudential for it. It's recovered through the French tax return itself. The table below lays out exactly which boxes carry which figure, and why each one matters.

Once the return is filed with the correct gross gain, the correct rate-triggering boxes, and the full amount actually withheld entered in 2CK and 8HX/8IX, the tax office treats what Prudential withheld as an advance payment against your real liability — not a final charge. If your real liability is lower (because of the S1), the difference comes back as a credit on your avis d'impôt, the same way any other overpayment does. You don't need to file anything extra with Prudential, and you don't need to ask them to reissue the certificate.

If the figures on your avis d'impôt don't reconcile the way you expect — the credit doesn't appear, or the wrong rate seems to have been applied — that's the point to raise a formal query (réclamation contentieuse) with the tax office directly, rather than going back to Prudential, since Prudential's role ended at the point it reported the gain and the amount withheld.

Important to Note

Capital losses on this bond can't offset anything else. If a different fund inside the same wrapper — or a different policy entirely — has lost value, that loss cannot be set against this gain. Each surrender is treated as its own isolated tax event.

The gross gain still counts toward your Reference Tax Income (RFR), even though tax was withheld at source and even after any allowance is applied. A withdrawal that looks tax-efficient on paper can still push your household over a means-tested threshold elsewhere — local tax exemptions, benefit eligibility, CSG tier rates — because RFR is calculated before any of those reductions are applied.

A French provider issues an IFU (Imprimé Fiscal Unique) — the standard tax certificate that reports investment income to both the client and the tax authorities in the correct French format. Prudential, as a non-French provider, does not issue an IFU, which is why the figures and box references in this article had to be identified manually from Prudential's own documentation rather than read straight off a French-format certificate.

Taxpert's filing assistant helps you work out which boxes apply to your specific policy age, premium dates, and S1 status. Try Taxpert →

Frequently Asked Questions

Why did I receive less than I withdrew from my Prudential bond?

Most likely, tax was withheld at source under the PFU regime, calculated on the taxable gain rather than the withdrawal amount. Check whether you signed a mandate authorising Prudential to deduct French tax before payment — if so, the difference between what you requested and what you received should equal roughly 30% (or a lower S1 rate) of the gain shown on your French Tax Statement.

Does Prudential know if I have an S1?

No. Nothing in Prudential's withdrawal process asks about S1 status, so any tax withheld at source will be calculated at the standard rate. If you hold a valid S1, you may have had tax over-withheld — this is corrected through your French tax return, not by contacting Prudential.

My policy is joint and only one of us has an S1 — how is the gain split?

By default, a joint policy's gain is split 50/50 between holders, and each half is taxed under that holder's own regime. The S1 holder's share goes through Box 8RC on Form 2042 C with the 8SH/8SI tick, while the non-S1 holder's share is declared normally. You cannot apply one holder's S1 status to the entire gain.

If too much tax was withheld, how do I get it back?

You don't need to contact Prudential. Enter the full gross gain and the exact amounts withheld (split between the income tax box 2CK and the social charges box 8HX/8IX) on your French tax return. The tax office treats the withheld amount as an advance payment — if your actual liability is lower, the difference is refunded as a credit on your avis d'impôt.

Does the 8-year allowance apply to this bond?

Only if the bond is genuinely over 8 years old at the time of withdrawal. This example bond was under 7 years old, so no allowance applied at all — the allowance (€4,600 single / €9,200 couple) only exists for policies past the 8-year mark, and even then it only reduces the income tax portion, never the social charges.

Is the International Prudence Bond taxed differently from a French Assurance Vie?

No — for French tax purposes it's treated the same as any other Assurance Vie: taxed on the gain only, with the same age thresholds, the same PFU/progressive choice, and the same S1 treatment. The difference is administrative, not tax-legal: Prudential doesn't issue paperwork in French tax format, so you have to identify the relevant figures and boxes yourself.

Sources: Prudential International partial cash-in confirmation letter and French Tax Statement (real client documents, figures anonymised) · impots.gouv.fr — "Comment sont imposées les assurances-vie en cas de rachat total ou partiel" (PFU rate, income tax/social charges split, 8-year allowance) · Article 990 I, Code général des impôts (Assurance Vie tax regime)