# Tax on endowment policy



## Wren100 (31 Dec 2010)

Twenty years ago I took out a 'with profits' endowment policy with Royal Liver which I have been paying ever since.  It is due to mature in February and I have just received the claim form.  Taking out the cost of the monthly payments, there should be a profit of some 4000 euro on the policy.  Is this taxable, and if it is, does anybody know at what rate, and what kind of tax (eg, income tax, capital gains etc) or do I just trouser the cash?  Thanks in advance.


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## jigsaw (3 Jan 2011)

I have the exact same policy with royal liver due to mature in 2 years. did you ever find an answer to your question?


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## Guest105 (3 Jan 2011)

i have a 25 year english endowment policy from MGM assurance due to mature next month. I live in ireland and i rang the tax office last year to find out about tax implications and i was told there was no tax payable on the proceeds .wren 100 i think your policy did extremely badly if you are only making 4000 euro profit after 20 years. I thought mine was doing poorly when i learned i am to receive 38,000 pounds, i was paying a monthly premium of 55 pounds. Still i am glad to get it as once again i will shortly be emigrating back to britain for employment.


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## Wren100 (4 Jan 2011)

cashier, thanks for answering.  As it happens, the policy was only for thirty-eight euro per month, and unfortunately, it's maturing at the trough of the biggest recession in 100 years.  I received a bonus for every year up to last year when they said there was nothing in the kitty, and I'll only find out in February if there's going to be a bonus for this year or a terminal bonus, which traditionally is where the big profit comes on these policies.  If I don't get either, then the profit will be the 4000 euro I mentioned in my initial post.  At least I won't have to pay tax on that if you are correct.


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## Wren100 (19 Jan 2011)

Update - after a visit to the tax office, I am informed that these policies DO attract tax.  Tax is payable at the rate of your income tax.  Frankly, I'm beginning to wish I'd just kept the money all these years and drank it.  Argggg!


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## Conan (19 Jan 2011)

Wren100,
I think your "advice" from the tax office is wrong. A policy of that vintage operated on the "net roll-up" basis, i.e tax was deducted at source on any growth (not on the capital - the premiums). So i dont think you will have any tax liability on maturity.


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## Wren100 (19 Jan 2011)

Conan,

Would the fact that the policy was with a British based company make any difference?  I would assume that any tax which Royal Liver paid would have been to the British exchequer.  Are our own jackals entitled to a taste also?


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## Guest105 (19 Jan 2011)

As stated above I was told by the tax office in Cork last year that I dont have to pay tax on the proceeds. The lady I spoke to at the time was unsure at first then she disappeared for a while and came back and told me I was ok.  My policy is maturing in England next month and I am glad to say no tax is payable at maturity there either.


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## Wren100 (20 Jan 2011)

Cashier, you've just described exactly what happened to me at the tax office the other day, only when she came back she told me tax was payable.  I think this merits further investigation.


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## boaber (20 Jan 2011)

Do you still have your policy conditions?  If so, they should have a section on Tax?

I would suspect that Conan has it bang on in his post above.


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## Wren100 (31 Jan 2011)

Further update:  The Royal Liver inform me that no tax has been paid on the policy, which means, presumably, that I'm liable for the lot.  Damn.  I repeat the above - you're better off drinking the money.


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## Conan (31 Jan 2011)

Wren100
I still think that you do not have a personal tax liability. If this is a policy effected with Royal Liver in Ireland then tax should have been deducted at source on any profits as they arose. Only policies effected after circa 2002 have an exit tax deducted on maturity. But again, it is up to Royal Liver to deduct this at maturity.


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## Wren100 (1 Feb 2011)

Conan, I don't suppose you know which legislation controls exit tax on these policies?  To be honest, all I'm getting from the Revenue is a lot of coughing and shuffling.  Nobody seems to know anything about this beyond a vague statement that tax is payable.  It's now getting beyond a joke and I'm strongly thinking of dumping the money in an account I have in Scotland and telling them nothing.


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## Wren100 (3 Feb 2011)

Ok, after a chat with an insurance broker today it seems I'm not liable for tax after all.  Apparantly, these policies only became taxable a few years ago.  A policy from 1991 is not taxable.  Just as well; there was little enough to come off it anyway.


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## TrueBlue1150 (11 Mar 2012)

*Tax on Life Assurance Policy*

I have an Endowment Life Assurance policy which I took out whilst working in England 25 years ago. It matures later on this year. I have asked several brokers if they know if tax is due when it matures but unfortunately no-one seems to know. I phoned the tax office in Cork to ask them and was told that the taxation on these types of policies can be quite complicated and that I would have to send in all my details before a decision could be made. Does anyone know what the criteria would for no tax to be due? I know that it is not taxable in England when it matures. I wonder if Revenue told Cashier that no tax was due because he was planning to return to England?


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## TrueBlue1150 (16 Mar 2012)

Thanks Cashier,
You have given me a little more hope now. You don't happen to remember what details you had to give them for you to be told that no tax was due? Was it because it was taken out so long ago?


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## Palerider (2 May 2012)

FAO Wren 100, what kind of terminal bonus did Royal Liver ( Now Royal London ) pay out on that policy, curious as I have one naturing this month after 25 years...still have no claim form tho'..?


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## jigsaw (16 Jun 2020)

Sorry to drag up an old thread guys but I have one of these legacy Royal Liver policies that just matured. 

I took out the policy in 2000 and have the original documents which clearly state that tax is paid at source and that I will not be liable for any tax.

But as you know, tax laws have changed over the years and Royal London took over the policy from Royal Liver so I'm hoping that there is no tax due.

Did any of you guys end up paying tax on your payout?


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