Moral Dilema

PaulCooper

I have recently cancelled a Life Insurance policy (lots of frustrating reasons, but not the subject of this post). The Life Insurance company informed me of the loss the policy had made --- £21k, they also told me that I could claim deficiency relief on this amount for this tax year, which suits me a lot as this year I'll earn a reasonable amount.
The moral dilema comes from the fact that separate from cancelling the policy, I complained about the policy being mis sold to me. They have now agreed with me and 'compensated' me (it neutralises the loss on the policy). I believe this in no way affects my right to claim deficienct relief; as I am always amazed at the expertise on this forum, I thought I'd throw it out for a second opinion
Paul

ceeforcat

It shouldn't - no tax is due on the repayment element of compensation. Tax is due on the 8% interest or so that is being paid on such compensation. I believe that most are informed of the tax deducted on claims.