We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Qualifying Policy incorrectly changed to Non Qualifying Policy by AVIVA

I have an old Norwich Union unit linked life policy which started in March 1980 for an initial 10 year period, thus making it a Qualifying Policy.  At the end of the 10 year period options allowed me to continue with the policy for a further 10 years and this was done in 1990, again in 2000 and again in 2010.  For extension in 2010 I had to remind AVIVA, who replaced Norwich Union, of my options.  In March/April 2020 I again had to chase up AVIVA to exercise my continuation option.  I completed the appropriate paperwork and was advised on 3rd June 2020 that my policy had been extended as requested.  Later that month I received a letter saying that the policy status had been changed to a Non Qualifying Policy because 'an error occurred and AVIVA did not send out a Qualifying Declaration and the deadline for its completion was missed.'  AVIVA's letter further stated that as the policy status had happened as a result of their actions they would compensate for any tax charged but would need to see details of the tax liability, including copies of the HMRC tax demand and receipt of the payment made.  I have complained to AVIVA that I want the policy status corrected, but AVIVA refuse stating that I would be compensated for the tax charge.  If the policy is encashed and a Chargeable Event Certificate is issued, it can take up to 22 months to complete the appropriate tax return and pay the liability and then AVIVA will have to be chased to pay the refund.  This is obviously unacceptable.  Even death does not solve the problem as a Chargeable Event will still happen and it will be left to my Executors to sort out the tax and recovery, if they become aware of it!  Does anyone know how I can make AVIVA correct their mistake now and leave me in the position I was and should be in?  VERY MANY THANKS.

Comments

  • dunstonh
    dunstonh Posts: 120,196 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    If the policy is encashed and a Chargeable Event Certificate is issued, it can take up to 22 months to complete the appropriate tax return and pay the liability and then AVIVA will have to be chased to pay the refund.

    22 months is very extreme and you can calculate the liability pretty accurately as long as you are not split between tax bands.

    At the end of the day, if you disagree with the outcome you have the right to refer it to the FOS.  However, as Aviva have agreed to cover any potential loss, the FOS may not be much use as they would likely consider that adequate.

    Is the plan actually still needed?    These types of plans went obsolete in the 90s.   Charges are high and returns are low.  Are you letting the tax dog wag the tail?    Is there actually going to be further tax?


    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 352.1K Banking & Borrowing
  • 253.6K Reduce Debt & Boost Income
  • 454.2K Spending & Discounts
  • 245.1K Work, Benefits & Business
  • 600.7K Mortgages, Homes & Bills
  • 177.5K Life & Family
  • 258.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.