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Sam
Sam, Accountant
Category: UK Tax
Satisfied Customers: 13657
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
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Dear XXXXX, Thankyou for your last answer. I asked the

Customer Question

Dear XXXXX,

Thankyou for your last answer.

I asked the question of Old Mutual that you suggested, and here is the response I had from them:

"Dear Mr Askew,

Thank you for your e-mail.

Your policy is a Unit Linked Life Assurance policy, as such it could potentially be subject to Income Tax not Capital Gains Tax.

When making decisions about any potential withdrawals you may wish to make from your policy, as a UK resident you should consider the tax implications of the different methods available. Tax liability will be effected depending on your method of encashment, I.e. partial or full surrender.

If you do not wish to fully surrender it is also possible to slice off some of your policy clusters and fully surrender those clusters, if you use this method you may receive more than your partial surrender request, but the withdrawal would be assessed for Tax purposes as a full surrender. For your information your policy consists of 30 sub policies.

I have attached some literature which explains this in more detail, the literature is Skandia branded, however Skandia are part of the Old Mutual group and therefore this information is appropriate for your policy.

In order to assess your most efficient Tax options you should discuss this with your financial adviser or Tax specialist.

If you have any further questions please let me know.

Yours Sincerely"

Basically, the questions I am seeking to answer at this stage are:

"When this scheme matures in November:
1. How will I be taxed on the proceeds, and
2. Should I thake the proceeds all in one go in to my UK bank account, or should I leave tham invested through Old Mutual, or should I set up a draw down at £x per year?

By the way, the scheme will mature with about £90k in it.

Regards

Steve Askew
Submitted: 3 years ago.
Category: UK Tax
Expert:  Sam replied 3 years ago.

Hi

 

Thanks for your follow up question and asking for me

 

1) The proceeds will be subject to income tax (so the profits will have to be added to your annual income)

2) I am afraid I am not a financial adviser, but a UK tax expert, or tax financial specialist, so you will need to take financial advise on what you should do with respect to this matured fund.

 

Thanks


Sam

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