chargeable event certificate endowment maturity

my endowment maturity but just received a chargeable event certificate

, im calling company soon as thought is one qualifying, but no there was a period of missed payments which could this of triggered it becoming non qualifying

first i heard of it today

but query is how do i work out amount if tax i owe

the policy was joint and total gain was just over £20,000 term was 25yrs it says tax has been paid which looks to be 20%

is the term 25yrs a important feature

my partner is low rate tax payer and i only receive careers allowance , but do receive tax credits

i called hmrc helpline they where confused that a endowment policy was non qualifying especially for the term

Comments

  • dunstonh
    dunstonh Posts: 116,040
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    The majority of endowments were qualifying plans and providers did not normally let plans become non-qualifying (i.e. amending the premium would restart the qualifying count. if you had enough years left they would often do it but not if you didnt).

    However, some providers did issue non-qualifying plans.
    i called hmrc helpline they where confused that a endowment policy was non qualifying especially for the term

    If it was a non-qualifying plan at the outset then it will never qualify.
    is the term 25yrs a important feature

    no.

    Are you a higher rate taxpayer? or close to being one so that the gain, takes you into higher rate? (and if joint, the gain is split in 2)
    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.
  • called insurers the policy lost its qualifying rights as i had missed a period of payment unpaid direct debit, this put me into Non qualifying.

    The guy said they should of notified me this but accidentally didnt so apologized,

    with regards tax to be paid i dont pay tax, and OH is low bracket so if he was to add himself the £10,000 as believe we split the gain? that still wouldnt push into higher tax bracket.

    i presume i still have to submit a chargeable event even if no further tax to be paid as its already been paid at 20%??

    if the event happened 20 april 2018, am i right in thinking i dont notify hmrc still then, im confused
  • dunstonh
    dunstonh Posts: 116,040
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    with regards tax to be paid i dont pay tax, and OH is low bracket so if he was to add himself the £10,000 as believe we split the gain? that still wouldnt push into higher tax bracket.

    The gain is split for each policyholder. So, a typical endowment is joint owner. So, that is 50% each. So, a £10k gain becomes £5k each.

    Basic rate tax is treated as paid at source. So, it would only be if the gain took you into the higher rate tax band. Which sounds likely from what you have said.
    i presume i still have to submit a chargeable event even if no further tax to be paid as its already been paid at 20%??

    No. If there is no tax to pay and you dont get a tax return then you do not need to notify HMRC. Only if there was a tax liability and you didnt get a tax return would you need to notify them. Or if you got a tax return (there is a box in other income to declare it).
    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.
  • thanks for that the gain was just over £10,000 each total £20,666.

    im awaiting what insurance company say as they sent Chargeable certificate to my old address not current address so they going to reissue one for tax purposes.

    i thought that if hmrc how they also receive a copy of CE certificate from insurers would expect me to complete a form even though no further tax to be paid

    other is SA so i presume he will have to disclose Chargeable event even if no further tax to pay in next years tax return?

    appreciate your advice
  • You can actually get a tax refund because of a chargeable event gain. Although the tax on the gain is non repayable if the gain itself is taxed as part of the Personal Savings Allowance rate band (0%) then the notional tax on the gain is overpaid tax (to a maximum of £200 tax) and this effectively pays some of the tax due on other income, wages, pension etc which frees up some of the tax paid on the wages, pension to be repaid.

    Won't apply to the op as they state no tax (normal income tax) paid but may be of benefit to others.
  • a refund does that apply to a higher tax payer, im even more confused

    am i right in thinking if chargeable event gain was made this yr i wont have to notify hmrc till next tax year.

    on sa tax return is it a easy enough route to follow, do i have to enter all the details from the chargeable event certificate?

    knowing me i probably enter wrong details in wrong box and end up getting taxed

    the certificate says issued with section 552 income and corporation taxes act

    i panic when i get official letters i dont really understand
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