Financial/Tax question.

  Simsy 17:30 04 Jul 2008


When I took my mortgage out, the amount borrowed was partly covered by an endowment policy.

Because of the way such policies have been performing over the past decade, (or thereabouts), I have gradually reduced the amount of borrowing that needs to be covered by the endowment.

I am now in the position that when the endowment matures, in about 5 years time, the payout will exceed the amount it's covering.

I'm pretty sure the answer is "No", but does anyone out there have the expertise to confirm that I do not need to pay tax on this "surplus"?



  Clapton is God 17:41 04 Jul 2008

Before the FE says it - it is not the function of this site to give financial advice.

Speak to an IFA or the people with whom you have the endowment or even HMRC.

  newman35 17:46 04 Jul 2008

This is not asking for financial advice - just what a tax position is.

Endowment maturities do not normally attract tax - I've had a couple mature in the last few years and ther's never been any tax to pay.

  Ranger 17:47 04 Jul 2008

Probably be able to get and answer to that at the moneysavingexpert website forums

  newman35 18:04 04 Jul 2008

The fact that it was linked to a mortgage has no bearing - it's just an endowment policy, and as such don't attract tax on the final payout.

  wiz-king 18:08 04 Jul 2008

I was one of the luck ones - my endowment policy more than covered the mortgage and I got some drinking vouchers out of it.

  oresome 18:11 04 Jul 2008

Perhaps of more benefit would be the ability to attribute a capital loss to the policy for the difference between what the salesperson said it would most likely achieve using very conservative estimates and the actual value at maturity which no doubt falls far short of this in reality over optimistic figure!

  jack 20:23 04 Jul 2008

On maturity, any surplus is tax free.
At least I was not charged or had a tax element taken out.

  Simsy 20:35 04 Jul 2008



  Forum Editor 20:42 04 Jul 2008

we're not able to offer financial advice here - nobody is qualified to do so, and you must not act upon anything that has been said in this thread without seeking advice from an independent, qualified source.

  laurie53 20:46 04 Jul 2008

Lucky you!

I'm the opposite and have had to increase the premiums on my endowment policy three times because the final return was not going to cover my outstanding mortgage.

In addition, last year I received yet another warning, with the restriction that I could not increase my premiums any more, and I've had to start a savings account to try and plan for the shortfall.

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