Chargeable gain?

merlinthehappypig

Can anyone explain in layman's terms what a 'chargeable gain' is. I can't work out if it is income tax or CGT.

It's not something I've come across before, but, on sorting out my parents in laws finances,I've come across some recent chargeable gains certificates from a policy they have with Standard Life. They have a lot of these certificates from the past 10 years or so.

The most recent of these are following a withdrawal from the policies in February this year. There are two certificates and the details are as follows.

Type of chargeable event - surrender (this is a part surrender)

Has tax been paid at the lower rate for savings - yes
Number of years - 13
Amount of tax treated as paid - £1143
Amount of gain - £5711

The other certificate is similar, but for lower amounts.

I don't know if these are annual certificates or cumulative totals.

They originally put about £13000 into this bond and have taken bits out over the years. They now only have about £2500 in it.

From looking at their tax records they haven't earned enough in recent years to pay tax (they are both in their 80's) so should have been getting interest gross of tax.

Is this something that can be reclaimed or something else entirely?

Any help appreciated.

dunstonh

A chargeable gain on a life assurance policy is when it hasnt qualified (or was non qualifying in the first place) and you create a chargeable event. Surrender is the most common one.

For non, lower (what was lower) and basic rate taxpayers there is no further liability unless the gain takes you into higher tax tax after top slicing relief. Higher rate taxpayers would have a further liability.

Is this something that can be reclaimed or something else entirely?

Its not interest and cannot be paid gross (unless held in an offshore bond and they have virtually no income).