Guest Angie-H

WHAT DO YOU DO WITH ENDOWMENT POLICY'S WHEN EMIGRATING TO OZ

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    Guest Angie-H

    Hello, Could anyone give us any advise on endowments, weve heard that if we leave them to mature in UK we would be liable for 40% taxation when money is deposited in Australia, Is this true ?. We have our visa and were relocating to Gold Coast March 2006.

     

    :?: :P [/b]

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    Guest Gary Lucas

    I think you're right in that if you were to continue paying into the endowment policy whilst living in Australia and then, once the policy matures, bring the cash into Oz, then you'll be taxed (endowments do not attract the tax free element that they do here). If you were to cash it in before you go across then that's a different matter as it's something you have earned before you became an Australian "for tax purposes".

    That's what I've been led to believe on this and am just in the process of getting surrender values on my poicies prior to moving across to Sydney in December. Anyone got anything to the contrary then I'd love to hear from you....before I surrender them (not that the useless things have done much for me over the last 18 years....but that's another story!!)

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    Guest mickroo

    Hi Gary/Angie

     

    I agree with you Gary best to get rid of them and not take the risk of anymore devaluation due to tax.

     

    Dont forget to try and sell the policies instead of just surendering them back. I tried this place http://www.endowmenttrade.co.uk first but my particular policy was unit linked so I was unable to sale it so had to surender it back, but its worth a try.

     

    Good luck

     

    Mick

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    I was told to cash my mortgage endowment in even though it only had a few weeks to maturity! you are spot on you would be liable to tax if it matured after you had left for Oz.

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    I certainly wouldn't agree that it is always best to cash them in.

     

    There will be a number of factors to take in to account which will include things like, how long they have been running for, whether any MVR/A's are attached etc etc.

     

    On the tax front, it may be that they are taxed on any growth year on year and not just when they mature. This will depend on if they are exempt from the FIF rules or not.

     

    If they escape the FIF rules and they are to be taxed only on maturity it will not be on the whole amount only the growth (it has been mentioned many times before by myself and others on here, this should not necessarily be a reason too avoid the growth by cashing in etc as it is better to pay tax on profit than not to pay tax but not make any profit).

     

    Regards

     

    Andy


    Director - Vista Financial Services - Financial Advisor for Poms in Oz - UK Pension Transfers / Financial Advice

    Andrew@vistafs.com.au FPA Member, Adv Dip FP www.vistafs.com.au Ph: 08 8381 7177

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    When you say you pay tax on the profit, would the profit be the amount that is finally paid to you, minus the amount of monies paid in over the term? Or would it merely be taxed on the whole amount paid to you?

     

    Thanks


    Living in Benowa, Gold Coast since Feb 2010 and loving it!!!

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    Just had another thought, if it is taxed on the whole amount received, is there any way of say transferring the amount to your children or anyone else, who would not then pay tax on it?


    Living in Benowa, Gold Coast since Feb 2010 and loving it!!!

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    If you want to keep the endowment then get it valued just before you leave the UK then you could only be taxed on any gain? from that date onwards.

     

    Endowments are really going nowhere at the moment and if you can sell you might be better off putting the premium else where.

     

    Just make sure you are covered for any life insurance part of endowment by getting some cheap term insurance if needed.

     

    IMHO

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    I tried to sell it a few years back, but for whatever reason, its not one that can be sold, or one that would give a return prior to maturity. However, as its not related to a mortgage, its now just a savings plan, I kept it going. Need to take some advice I think!

     

    Thanks anyway.


    Living in Benowa, Gold Coast since Feb 2010 and loving it!!!

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