Surrendering Endowment Policy - tax implications?
Discussion
What paperwork did you get from the endowment provider? There might be a FAQ type section in the original or subsequent paperwork explaining what happpens when the policy ends.
It might be worthwhile talking to them directly about what tax procedures need to be followed if and when the policy is closed down prematurely.
The last and worst place to look would be the Revenue's own web site as it will contain far too much information and you won't know what relates to your specific product.
Your product is almost 20 years old so there may be no tax implications at all. Many of these policies move into a tax free zone once they last longer than ten years. Obvciously, as I say above, talk to the providers and see what they say.
It might be worthwhile talking to them directly about what tax procedures need to be followed if and when the policy is closed down prematurely.
The last and worst place to look would be the Revenue's own web site as it will contain far too much information and you won't know what relates to your specific product.
Your product is almost 20 years old so there may be no tax implications at all. Many of these policies move into a tax free zone once they last longer than ten years. Obvciously, as I say above, talk to the providers and see what they say.
Edited by Eric Mc on Friday 18th January 10:04
An update in case this is useful to anyone else...
I've spoken to the provider, they *think* the policy is qualifying in that there won't be any tax and they say that even if it is taxable then it will only be on the "gain" over and above what has been paid in....now unsurprisingly that gain is only around £450!
What they can't tell me is whether anything that is taxable is taxed as CGT or income tax.
I've spoken to the provider, they *think* the policy is qualifying in that there won't be any tax and they say that even if it is taxable then it will only be on the "gain" over and above what has been paid in....now unsurprisingly that gain is only around £450!
What they can't tell me is whether anything that is taxable is taxed as CGT or income tax.
If it's CGT then there is a good chance you will have no tax to pay - unless you have other gains in the tax year which push you over the personal Capital Gains Tax limit (currently £9,200).
If it was taxable under Income Tax (which I doubt) they would probably be obliged to deduct this tax at source.
If it was taxable under Income Tax (which I doubt) they would probably be obliged to deduct this tax at source.
I'm hoping to use two years CGT allowance (this tax year and last tax year for two of us) to offset the gain on the (rental) property that went with the endowment originally so I guess it makes sense to hold onto the endowment until April to slip it into next year when I won't have any gains.
I hadn't thought about that I was going to press on and surrender it now but it makes sense to keep it.
I hadn't thought about that I was going to press on and surrender it now but it makes sense to keep it.
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