Should We Abandon Endowment and Overpay Interest Instead?

HarveyGal

Radarjet: tax payable on endowment payout? Is that cos you sold your policy?

When my endowment pays out, am I liable for tax or only if sell/surrender the policy early?

Thanks.

EdInvestor

How long did radarjet hold his endowment?

dunstonh

I didnt realize I'd get stung for tax on it the next year

You only create a chargeable gain if you do a chargeable event when the policy has yet to qualify to be free of any further tax. The most common and easiest qualification point is after the 10th anniversary. As long as its been running at least 10 years, you can surrender without any further tax liability.

For radarjet to have a tax liability, that would suggest that the policy had not qualified and he is a higher rate taxpayer.