Endowment policy compensation and tax credits

cozzasmith

Myself and my husband recently received £11,000 total compensation for a mis-sold endowment policy which is held in joint names. Do I need to declare this on my tax credits form and if so, in which section. The endowment policy itself is still in place and has 2 years to run before it is 'paid up'.

Please help as I am pulling my hair out.

alwaysonthego_2

Is it in tax free savings account? then no you do not have to declare it.

If it is in a taxed account you only declare any interest over £300 - it goes in other income.

cozzasmith

Partt of it went into a children's building society account in my daughter's name and the rest into our regular current accounts which we pay interest on.

So if the total interest paid is over £300 I need to declare the interest? But if not, I don't need to declare it as 'extra income' on my child and working tax credit application?

I'm sorry for asking so many questions but this is really hard to get my head round. Many thanks for your reply.

alwaysonthego_2

cozzasmith wrote: »

Partt of it went into a children's building society account in my daughter's name and the rest into our regular current accounts which we pay interest on.

So if the total interest paid is over £300 I need to declare the interest? But if not, I don't need to declare it as 'extra income' on my child and working tax credit application?

I'm sorry for asking so many questions but this is really hard to get my head round. Many thanks for your reply.

That's correct , it is unlikely you will make over £300 interest on £11K.

cozzasmith

Thank you very much. I can finally file my application after weeks of headaches over it! Many thanks.