Dominic Harper

Hi Admin 19 Thank you for your reply. Understand that legislation may change. If I surrender the poluicy today, is it correct that it would not be liable to tax under current rules? Thanks 

Name removed admin .

Hi I am looking for some guidance on taxation of a German endowment policy. I am a UK citizen. I moved to Germany in 1994 and back to the UK in 2004. In 1998, I took out a ‘Kapitallebensversicherung‘ or ‘capital sum life insurance’, i.e. an endowment policy (but not linked to a mortgage). It is with Standard Life, but it is a German policy with the German arm of Standard Life. I paid premiums from December 1998 to April 2012 when I realised it wasn’t really a good investment. I paid total premiums of ~€22k. The policy is due to mature at 30.11.2031. The policy provides a life insurance element and will pay out ~€27k if I die. It has also been building up a capital value which is paid out at maturity or early surrender. It now has a guaranteed value of ~€22k (so will pay that even if the value of investments falls), or a current value of ~€29k which it would pay out now if I surrendered the policy. I am now considering surrendering the policy in the next year or so rather than waiting until 2031. I am assured that a payment would not be taxable in Germany. I think and hope that it may not be taxable in the UK, but I have heard conflicting views on this in the past. I believe this would count as a ‘qualifying policy’: It has a term > 10years. I paid premiums for >10 years (1998-2012) The life assurance value is >75% of premiums paid (€27k > 75% of €22k) If I surrendered now or in the future, the policy would already have run for >75% of the intended term. (1998-2024 = 26 years. Which is >75% of 1998-2031 = 33 years.) Does this mean it is a ‘qualifying policy’. And if it is, does that mean the surrender payment would not be liable to either CGT or income tax? Thanks for any tips and guidance.