Endowment - cashing in and Tax

islandcat

A simple question:

I will be cashing in my endowment as I am paying off my mortgage early. Will I be taxed on the payment I receive?

Many thanks

dunstonh

If you have qualified then no. If it hasnt qualifed then yes. If its a non qualifying plan (rare) then yes.

The easiest qualification for no further tax is to have gone at least 10 years.

islandcat

Dunstonh

Thanks for that.
I have had the policy since 1997, so longer than 10 years.

How can I find out if it is a non-qualifying plan ?

holly_hobby

Low cost (mortgage) endowments are qualifyiing policies - with main criteria being as long as premiums are regular, and it has been held (in your case) for a min of 10 yrs. (or 75% of the term if the original policy term was 10 yrs).

So no there shouldn't be any tax payable upon your surrender of the plan.

However, advice given on a forum should always be verified .... just give your provider a quick call to settle the nerves !

Hope this helps

Holly