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endowment and capital gains tax

chatterboxchris
chatterboxchris Posts: 27 Forumite
in Mortgages & endowments
Please can you tell me the tax situation on endowments. We have had one endowment mature this year in Feb for about £40,000 which paid off achunk of interest only mortgage and we are about to surrender one that has just under 4 years to run the value will be approx £17,000 again paying more off the interest only mortg
age leaving about £6,000 on it . Will we have to pay any tax eg capital gains ? Help please would be appreciated.

Comments

  • TEDDYRUKSPIN
    TEDDYRUKSPIN Posts: 1,528 Forumite
    Question is not 4 years. How long have you had this endowment for? If it is more than 10 years you will be exempt from CGT.

    This will be considered a qualifying policy and you should be fine.

    I suggest you double confirm with the company as well as you will definitely lose any terminal bonus.
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  • dunstonh
    dunstonh Posts: 120,428 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Its exempt from CGT regardless of years. Its income tax that it is potentially chargeable for if it hasnt qualified.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    TEDDYRUKSPIN wrote: »
    you will definitely lose any terminal bonus.


    Not so.Accumulated TB is included in surrender value.Some endowments no longer attract any TB of course.
    Trying to keep it simple...;)
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