Prudential Flexible Investment Plan

redjumpa

In 2012 we invested 90k into a Prudential Flexible Investment Plan. It is now valued at 128k. We are considering cashing in as it is currently not performing well. In simple terms (if possible) how is tax calculated. Are we taxed on the full profit divided by the 11yr life of the plan?
The plan is in joint names and my wife was a non tax payer for 6 of the 11 years.

dunstonh

In 2012 we invested 90k into a Prudential Flexible Investment Plan. It is now valued at 128k. We are considering cashing in as it is currently not performing well

What do you mean by currently?
It is unlikely that your reason is valid.  i.e. there may be other reasons for surrendering but 2022 being a negative year for most asset classes is not one of them as negative years are expected and normal.     A negative year is not an indication of the average return.

 In simple terms (if possible) how is tax calculated. Are we taxed on the full profit divided by the 11yr life of the plan?

The gain plus any previous withdrawals that were not surrenders divided by the complete number of policy years held.  If joint, divide it by the number of policyholders.  That is then added to your income.  (there are further variations depending on amounts and your current tax status.  This is the initial quick and dirty method). 

Albermarle

 We are considering cashing in as it is currently not performing well.

Nearly all investments are down since Jan 2022, so how badly is it performing and over what time scale.

redjumpa

Thanks Albermarle and dunstonh It's dropped 6k this year. Being a novice, that was worrying to me. But from what you say.... probably not. 

As for the tax, I assume my wife would pay less for her 50% , subject to not reaching her personal allowance for 6 years?