Income Protection Payments - Taxable?

edited 30 November -1 at 1:00AM in Boost Your Income
2 replies 1.6K views
zebbzebb Forumite
12 Posts
edited 30 November -1 at 1:00AM in Boost Your Income
Can anyone please advise whether the monthly income payments from an income protection policy are taxable or not. From what I can see from current policies offered, such payments are indeed free of tax. However, this policy was taken out back in 1994 and all monthly premiums since then have been out of already taxed money - viz were not a company benefit or the like. So, I assume the payments will be tax free. However, are payments subject to current tax rules or potentially be subject to rules at the time the policy was taken out - ie in 1994?

If any anybody could advise, I would be very grateful. Thanking you in anticipation, Zebb.

Replies

  • WizzbangWizzbang Forumite
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    According to Aviva, "Income Protection Payments are tax free payments under the current rules, although this might change in the future"

    So one would assume this means that it has not always been the case and you may well have to pay tax if you have an older policy. You really need to ask the company or a financial advisor, or dig out your policy booklet.
    Minimalist
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  • zebbzebb Forumite
    12 Posts
    Wizzbang: Thanks for you reply. I've just had confirmation from HMRC that income protection payments will indeed be tax free. The rules were different back in 1994 when the policy was taken out but in 1996 HRMC changed its 'rules' and providing all premiums were made out of taxed income, then all payments will be tax free. On gov.uk, IPTM 6110 covers this.
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