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Endowment policy cash in
doctorhirst
Posts: 3 Newbie
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?
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Comments
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My endowment had no tax implications
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What tax?doctorhirst said:What should I look out for regarding tax.1 -
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.1 -
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.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.1 -
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?0
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Was the policy a single premium bond?0
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With profits fund0
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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?0 -
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).doctorhirst said:With profits fund
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.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.4
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