Saving and Protection

speckyfoureyes

I took out a Maximum Protection Plan in 1978. The guaranteed life cover was 8872. Now it is so much more that that. If I cash it in will I have to pay tax on the money earned over the life cover.

kingstreet

If it's a qualifying policy there will be no further tax to pay as basic rate tax is deemed to have been paid on the returns on the fund in which the money is invested have been made.

If it's non-qualifying, the same applies for basic rate tax, but any gains you've made will be aggregated with your income and taxed at your marginal rate.

Ask the insurer what type of policy it is - qualifying or non-qualifying.

speckyfoureyes

Broker is long gone!! but had a look at the policy and looks like I am getting tax relief on it. Cost of the policy £12.12 and I pay £10.20

kingstreet

Broker?

I suggested contacting the insurer to ask.

As the plan is eligible for LAPR, IIRC it has to be a qualifying policy, but again I suggest you contact the insurer to verify this as LAPR was abolished 30 years ago this month and I'm not as young and quick of mind as I was back then.