Chargeable Gains

lizzydarcy

I am posting this on behalf of a family member who has no internet access.

He is in his late 70s and his only income is his state pension and disability. He's currently applying for housing benefit. He opted to surrender an insurance policy and made a chargeable gain of £500.

The letter confirming the surrender has gone through states he may have to pay tax on this and he is very unsure because his income is very low.

I have searched for info but struggled - even on the HRMC website.

Can someone help?

jimmo

The correct term is “Chargeable Event Gains” but even using that you may struggle to find relevant information.

The best I could find quickly was this.

http://www.hmrc.gov.uk/helpsheets/hs320.pdf


Provided the insurance company is a UK company the chargeable event gain is taxable income but treated as if basic rate tax has already been paid on it. However the notional tax paid is not repayable.

Its impossible to say whether this additional income could affect any age related allowances unless you are prepared to share details of his income.

lizzydarcy

jimmo wrote: »

Its impossible to say whether this additional income could affect any age related allowances unless you are prepared to share details of his income.

Thank you for your reply.

I don't think he would be comfortable, even though I am relevantly anonymous, giving exact figures on an online forum.

I'll have a look through the info you posted and try and get details from the HMRC helpline.

Meanwhile, if anyone else can shred some more light on this, I'd be grateful.

insured

It is highly likely that there will be no additional tax to pay on the gain. However, if you are unsure about figures etc, can I suggest your relative contact Tax Advice for Older People. It is free.
http://www.taxvol.org.uk/
I wish the BGs would make this a sticky on the over 50s board.

lizzydarcy

insured wrote: »

It is highly likely that there will be no additional tax to pay on the gain. However, if you are unsure about figures etc, can I suggest your relative contact Tax Advice for Older People. It is free.
http://www.taxvol.org.uk/
I wish the BGs would make this a sticky on the over 50s board.

Thanks for your help with this.

Finally got around to calling them and you were right, there's nothing more to pay.