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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5015
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have a Flexible Mortgage Plan (Endowment Policy) to cover

Resolved Question:

Hello,
I have a Flexible Mortgage Plan (Endowment Policy) to cover an interest payment only mortgage. According to the policy document the plan is a Qualifying Policy. We contracted it in 1999 so more than 10 years ago. I am considering surrending it before maturity date (2024) and cash in the plan to re-pay and refinance my mortgage.
I wanted to check if I am liable to any gain (capital or chargeable event) tax if I decide to cash in early. I thought that irrespective of hypothetic gain (to be assessed) because I would surrender later than the 10 years threshold I would be exempt to any gain. Could you please confirm if this is correct?
Thanks.
Submitted: 10 months ago.
Category: Tax
Expert:  taxadvisor.uk replied 10 months ago.

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.
Many thanks

Expert:  taxadvisor.uk replied 10 months ago.

Thank you for your question.

Qualifying policies generally do not give rise to chargeable event gains as these policies generally have a minimum term of 10 years with fairly even premiums payable at regular intervals, such as weekly, monthly or annually.

You are correct in your understanding.

Confirmation of this can be found here

https://www.gov.uk/government/publications/gains-on-uk-life-insurance-policies-hs320-self-assessment-helpsheet/hs320-gains-on-uk-life-insurance-policies-2015

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 10 months ago.
Thanks for your response.I searched on the link you've provided and based on this, I rang back my policy provider who has confirmed that the Plan is a Qualifying Policy. In this case I assume that the matter is closed and that I can take my decision considering that there will be no tax implication. This was what I thought but wanted a check from a professional which you gave me so thanks for this.I don't think that I have any further question. That was I guess quick and easy for you.
Expert:  taxadvisor.uk replied 10 months ago.

Thank you for your reply.

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