Endowment policy cash in

doctorhirst

I've come to the end of my policy term and want to take my money out. What should I look out for regarding tax. I believe  I have a tax allowance. Anyone know if I'll get stung?

ColdIron

My endowment had no tax implications

MEM62

doctorhirst said:

What should I look out for regarding tax. 

What tax?  

Beddie

I believe there is no tax to pay, I certainly didn't when mine matured a few years ago. A Google search agreed with me.
So there's nothing to worry about.

dunstonh

If it was a qualifying endowment policy and its matured then there is no further tax.
If it was a non-qualifying endowment policy, then there is potential for further tax. 

The vast majority were qualifying.

doctorhirst

Hi many thanks. I’ve been told that if you earn over the 40% tax threshold I’m liable for chargeable gains. Has anyone paid that and how is it calculated? 

xylophone

Was the policy a single premium bond?

doctorhirst

With profits fund

xylophone

Have a look at

https://www.gov.uk/hmrc-internal-manuals/insurance-policyholder-taxation-manual/iptm2020

The detailed rules governing whether a policy is a qualifying one are set out at ICTA88/SCH15. Insurers will take steps to determine whether the policies they are writing are qualifying or non-qualifying and will inform their customers accordingly. The guidance at IPTM8000 onwards is written primarily with insurers in mind and covers the rules in some detail.

What has your provider said?

dunstonh

doctorhirst said:

With profits fund

The fund isnt important.  The type of policy is.  You mentioned endowment in the thread title.  That means it would have a maturity date but could be paid as a single premium or regular premium.       These would either be qualifying or non-qualifying.  Qualifying would mean no further tax liability on maturity.  Non-qualifying would have a tax liability on maturity (if higher rate).

The ones that do not mature but are open ended are not called endowments.  They are called whole of life assurance plans and they would have a tax liability on surrender.