is CGT payable on early cash in of endowment policy

W

westgirl

Guest
I can't find any relevant information on if CGT is payable if we cash in an endowment policy ( policy taken out in 1990) We will barely get back what we have contributed over past 19 years. It has a further 6 years to run but we have worked out that if the performance continues as it is we would get back less than the total we have paid in!Can anyone clarify?
P.S.still paying monthly premium.
 
CGT will only become payable if the amount you have paid in is less that the cashing amount. If you cashed in early now you would be entitled to some relief from holding it fior the period up to when they changed the Tax law. Remember things have got better in the last year and with the recovery are likely to continue.
 
Thanks mercman, I know things have got better however that is not reflected in any increase to Terminal bonus. there has been no increase for about 8 years !!!Even during the "boom" no bonus was added!When was tax law changed ? and is it 25% of capital gains on the amount above what has been paid in ?
 
Yes 25% on any appreciation paid at source (i.e. deducted from encashment value at payout).
 
I didn't realise that CGT was payable on the proceeds from an endownment policy.

Anyway, be sure to use the Multiplier when calculating your gain (if any) as you are allowed to offset inflation over the 19 years against the gain.

 
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