tayley

Hi everyone
after a bit of advice from anyone who has had dealings with cashing in or not cashing in endowment policies during the migration process.

Mine is due to mature in 8 years, and as we all know these policies are not predicted to pay out a great amount of profit, if I left it for 8 years, will i be taxed in both counties when it matures? Or is it worth cashing it in now bringing it with me and investing it in something similar in OZ - not sure about the interest rates over there for investments.

any advice greatly received especially from anyone who has already made these enquiries.

Australia_bound?

Would like to know the answer to this one as well. I suspect it'll be taxed both ends!!!

marvinc

Me too!

Nu-Shooz

We cashed ours in, as it wasn't worth much in the end anyway. We would have had a shortfall. Depends on how much it is worth i guess.

Wendy

I cashed mine in too.

I looked into selling it, but the amounts I was being offered were less than what I cashed it in for

Guzzler&Sas

Hi,

Cashed ours in before we left the UK and brought it over with the rest of our monies no tax to pay.

I'm not sure but I think if you leave it to mature you will only pay Australian tax on the growth between your UK departure date and maturity date.

Guzzler

Grayling

Actually the ATO treat the ANNUAL growth as income and tax you accordingly....Every year not just when it matures.

G

expatadvisor

A typical endowment has a life assurance element in it to make it a qualifying policy and make the proceeds tax free on maturity in the UK. Most have been used to cover mortgages, some for long term savings, school savings etc. All represent woeful value for money. The life asurance costs are typically very high, and then there can be a typical 5% initial charge on buying units in your selected fund plus annual managment charges. Then if you are one of the unfortunate ones who invested in With Profits funds your returns are dependent upon the whim of the respective company' s actuaries. They are also totally inflexible as you cannot increase, decrease or later premiums in anyway as this would effect their tax free status on maturity.

My conclusion a long time ago is that they are a complete and utter waste of time, the latest figures on returns shows that companies like Standard Life have 90% of policies that will not reach there stated goals. With regards to the ATO it is not just a matter of tax on the growth each year plus a tax liability on maturity and encashment if you bring monies into Australia- the calculation of taxable gains is more complicated than that but non the less with the same potential result.

My own personal advice would be to cash them in before you go, take a hit if there is one and then take out a life asurance if such cover is required, and look at more tax efficient savings in your respective countries of residence once you have settled down.

canifixit

I cashed mine in. Having worked out the surrender values plus all the payments I would have made to maturity, I found there to be little difference in that and the projected valuations on maturity.Coupled with the A.T.O. tax implications I decided I could do better things with the money now.

Country Boy

You shouldn't forget the Terminal Bonus you (may !!) receive on top of the maturity value.

In some cases the TB can be 40% or more of the total value of an endownment.

CB

Grayling

And if that is the case......you will be taxed on the bonus as if it is income.

It will be included as part of your income for the year you recieve it.

G

h2oskineil

What if we are intending to pay off a mortgage in the UK and not bring the money over.... will that still be taxable?

Nwil.

Wendy

Yes, you are taxed on your worldwide income.

ktyler1961

Mine had eight years to go, Norwich Union. I cashed it in by selling it after getting loads of quotes from various companies. On the way here I met someone in Thailand who recommended an exciting but very risky share on the AIM in London. I took a hell of a risk with 20K, but it paid off by growing to five times its value. It was a mad move, but so is leaving your country when you think about it.
The endownment was so boring, the high risk share so exciting.