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Endowment policy - is it taxable?
David042
Posts: 2 Newbie
I'm ashamed to say I've no idea!
I took out an endowment policy when I was younger, with the intention of using it against a mortgage. Circumstances meant that this never happened. I have, however, kept paying the premiums every month, and it's due to mature in about 8 years time.
The annual statements say that with bonuses, and the company's 'promise', it will be worth a minimum of £70,000.
My question is - if I keep going until the policy matures and it is indeed worth (for argument's sake) £70k, do I then get:
A) A cheque for £70,000, tax free?
A cheque for £56,000 as HMRC has deducted 20%?
C) A cheque for £70,000, at which point HMRC suddenly takes note of a basic rate tax payer acquiring a large sum of money, and puts me up to a higher rate tax band?
I really should have asked all these questions 17 years ago, but I was young, naive, and 25 years seemed like a lifetime away!
Cheers!
I took out an endowment policy when I was younger, with the intention of using it against a mortgage. Circumstances meant that this never happened. I have, however, kept paying the premiums every month, and it's due to mature in about 8 years time.
The annual statements say that with bonuses, and the company's 'promise', it will be worth a minimum of £70,000.
My question is - if I keep going until the policy matures and it is indeed worth (for argument's sake) £70k, do I then get:
A) A cheque for £70,000, tax free?
A cheque for £56,000 as HMRC has deducted 20%?C) A cheque for £70,000, at which point HMRC suddenly takes note of a basic rate tax payer acquiring a large sum of money, and puts me up to a higher rate tax band?
I really should have asked all these questions 17 years ago, but I was young, naive, and 25 years seemed like a lifetime away!
Cheers!
0
Comments
-
Hi
Since you have held the endowment for over 10 years, you won't have a chargeable event when it matures so you won't have any tax to pay hence you should get a cheque for the full amount.0 -
\o/
Something to look forward to then.
Thanks very much!0
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