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  • FIRST POST
    • James More
    • By James More 17th Mar 17, 12:46 PM
    • 3Posts
    • 0Thanks
    James More
    are mortgage endowments taxable
    • #1
    • 17th Mar 17, 12:46 PM
    are mortgage endowments taxable 17th Mar 17 at 12:46 PM
    Hi to all, hope someone can help.
    My wife and I were both sold interest only mortgages and endowments in our singleton years. Two houses became one and on a repayment mortgage (thankfully). Despite not performing, we continued paying the endowments and find ourselves needing to get hold of capital to support our aging parents. We are both higher tax rate earners and can't find usable or consistent advice on tax liability if we cash in the schemes whether that be income tax or cap gains. Conflicting information about time/qualifying/none qualifying/cap gains/income tax (tax office was next to useless with their help). Background info: Policy 1 started June 1998 and Policy January 1999, both started life as Royal Sun Alliance and through subsequent takeovers are now Pheonix. combined value is c. 80k (should have been well over a hundred by now to be in line with the mortgage).
    Q. Do we have to pay tax and if so what type and %... or is it totally tax free (fingers crossed).
Page 1
    • dunstonh
    • By dunstonh 17th Mar 17, 12:52 PM
    • 89,483 Posts
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    dunstonh
    • #2
    • 17th Mar 17, 12:52 PM
    • #2
    • 17th Mar 17, 12:52 PM
    IF the endowment is a qualifying plan then there is no further tax to pay
    If the endowmetn in non-qualifying then there would be tax payable.

    Most endowments were qualifying. A very small number were non-qualifying but do exist.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • James More
    • By James More 17th Mar 17, 12:57 PM
    • 3 Posts
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    James More
    • #3
    • 17th Mar 17, 12:57 PM
    • #3
    • 17th Mar 17, 12:57 PM
    @dunstonh. Very kind of you to reply and so quickly.
    I've no idea what constitutes qualifying or non qualifying. Could you tell me how I'd find out or tell the difference.
    Many thanks James
    • AnotherJoe
    • By AnotherJoe 17th Mar 17, 1:15 PM
    • 7,235 Posts
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    AnotherJoe
    • #4
    • 17th Mar 17, 1:15 PM
    • #4
    • 17th Mar 17, 1:15 PM
    You'd ask the endowment company.
    • kingstreet
    • By kingstreet 17th Mar 17, 1:16 PM
    • 31,931 Posts
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    kingstreet
    • #5
    • 17th Mar 17, 1:16 PM
    • #5
    • 17th Mar 17, 1:16 PM
    Here's a copy of the Qualifying Policy rules;-

    http://www.pruadviser.co.uk/content/nav/about/26674/pghome/34054/48130/48157/

    Either your policy documentation should indicate the status, or the insurer will be able to tell you.

    In my Sun Alliance days, from 1984 - 1988, the policy documentation showed qualifying and eligible, or qualifying and non-eligible with the eligibility referring to Life Assurance Premium Relief, or LAPR which was abolished in March 1984 for new policies.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • James More
    • By James More 17th Mar 17, 2:02 PM
    • 3 Posts
    • 0 Thanks
    James More
    • #6
    • 17th Mar 17, 2:02 PM
    • #6
    • 17th Mar 17, 2:02 PM
    @dunstonh, @AnotherJoe, @Kingstreet
    Just phoned the endowment company and confirmed mine is a 'Qualifying' policy. Your Pru link was very useful too thanks, stating not taxable after the first 10 years of premiums paid (if I understood that correctly). I'm so relieved from your advice that I have no Cap Gains or Income Tax liability being a PAYE higher rate payer (Assuming I got this right). Sorry to say I am a total finance-a-phobe and thank you very much for the piece of mind you have given me.
    Thanks James.
    Last edited by James More; 17-03-2017 at 2:07 PM.
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