Unassigned endowments and tax

hebe

I had some great help here before, so am posting with another question.

I have two endowment policies which are not currently assigned to a mortgage, but will be used to help pay down a mortgage when they mature. Is the money released on maturation still tax-free even if the policy isn't assigned to a mortgage? I have had the policies from day 1.

Thank you.

EdInvestor

Yes, non assignment has no effect. BTW the reason they are "tax free" (ie there is no more tax to pay) is that you have already paid 20% tax on the gains inside the endowment over the years and will continue to pay in the future.

You wouldn't pay such taxes if the money was in an ISA.

dunstonh

Upto 20% Ed means. The income on investments held within the funds still benefits from the tax credit in the same way unit trusts in ISAs do.

hebe

Thank you!

I didn't know that about the tax.