Endowments - Trouble ahead!

dunstonh

payless wrote: »

The bank I worked at in the mid 80's did

I didnt get into mortgages until after banks and building societies were allowed to compete against each other and the market opened up. That was about 1991 ish?

not sure whether this works for anyone taking out an endowment more erecently though as

"we were just in time to get tax relief and avoid paying tax on the final amount, which would have dented the final payout for sure."

It was abolished in the 80s but anyone that had it got to keep it for the rest of the term.

Geenie

I believe it was stopped about March 1984.

JackRS

Geenie wrote: »

I believe it was stopped about March 1984.

I was advised somewhere on a thread in the tax forum that edowments linked to mortgages over 10 years old were not liable for tax. Our policies where taken out between 1986 and 1996?

dunstonh

JackRS wrote: »

I was advised somewhere on a thread in the tax forum that edowments linked to mortgages over 10 years old were not liable for tax. Our policies where taken out between 1986 and 1996?

LAPR - tax relief is not the same thing as qualifying for no additional tax on a chargeable event. As you took yours out after 1984, you do not qualify for LAPR tax relief. However, all fixed term endowment policies are qualifying policies and providing they hit a qualifying point (of which 10 years with no premium change is one of them) then the proceeds are paid with no further tax liability. Even if you are a higher rate taxpayer.

JackRS

Thanks for clarifying that Dunstonh