Cashing in endowments..?? CG tax??

ipri

Do I pay tax..Or CGtax on cashed in endowments?? ian

dzug

No CGT

In some circumstances I think you may pay income tax if you cash in too early.

Edit - having thought about it while doing the washing-up, I'm not so sure about it.

I may be harping back to the days when you got tax relief on endowments and had to pay back the tax if you cashed in early.

No doubt somemone will be along with a better answer.....

setmefree2

Hi,

I cashed in an endowment and just put the proceeds to my mortgage - no one (ie Friends Provident) mentioned CGT;)

Trying_to_be_good

When I took out my endowment I took out one for a higher rate taxpayer as there was some osrt of implication on cashing in, but not sure about the rules now.

Setmefree2 - ignorance is no excuse if they catch up with you later and you shoudl have paid some tax, penalties/fines can double the amount you owe, so just be careful!

hummingbird

Hi ipri, i've been wondering the same thing. I'm trying to decide whether or not to cash in my endowment, but it only has another 4and a half years to run, so although in many ways I could do with the cash, I'd also like to see it through now. I'm expecting the statement this month, so that might help me to decide. I think I'd feel cheated if I had to pay tax on it! However if I cash in it will be paying into my mortgage so I'd be saving loads of interest.:j

Does anyone know if endowment policies still get a terminal bonus? I suppose it must depend on the company and how well or otherwise the policy has performed. Mine is in shortfall like most, but has done better over the last couple of years.

george_jetson

If you cash in an endowment and have gained capital then I'm jealous. After ten years of paying into my dog of an endowment it was worth £40 more than I'd paid into it :mad:

fwiw I do not recall CGT being mentioned when I was being sold my endowment.

setmefree2

Setmefree2 - ignorance is no excuse if they catch up with you later and you shoudl have paid some tax, penalties/fines can double the amount you owe, so just be careful!

Sorry TTBG I was just joking - my endowment proceeds were well under the CGT limit and couldn't have constituted a profit anyway since I was only getting back what I'd paid in.:o