carolwilk34

Hi Folks

We have an endownment worth £45,000 on our current UK mortgage, the rest being repayment.

Question is, can we use the UK endownment towards part of our new ozzie mortgage?

Thanks.





Carol x

Sunny_Glesga

I contacted our policy holders and was told that it can only be used for UK Property. (Prudential)

carolwilk34

Hi, thanks for that. Did you have to cash it in then?

Notice you are in glasgow? We are in Wemyss Bay, where you going? or are you there?



Carol

Sunny_Glesga

We are still sitting here in Sunny Glesga Waiting for a Visa, hopefully off to Perth. ( Mandurah, Rockingham.......................?????)

Still undecided which way we will go with this, either cash it in and invest it over there and start a savings plan with what payments we would have made towards it for the next while. ( it was for the kids anyway). If we dont do that the its going to run its course here and get attacked with the TAX man in OZ, getting hammered in the last couple of years till maturity.

Missus said to leave it running as its got life Ins also to the nice sum of £00000k, Wondering if she has anything planned for me!

make a decision when we have too

MartinLuther

Sorry to give you one more thing to worry about, but Endowments come under the FIF (Foreign Investment Fund) rules. Under these rules if the total of the FIFs owned by you and your associates (typically your family) is more than $50k, then you will be taxed each year on their yearly increase in (surrender) value.


PS: ISAs; Peps; Personal, Group and Stakeholder pensions; and Term Life Assurance are also considered FIFs

moneypenny20

We cashed ours in and used some of it to pay for shippers, flights etc as the house wasn't going to complete until the day we planned to fly. The rest of it we sent over to Au bank account so there was money immediately we landed.

carolwilk34

So, can we keep paying it in UK until it runs its course (another 12 years) or do we have to cash it in?


Carol

Grayling

You can keep it as long as you like but the annual growth will be counted as income by the ATO and you will be taxed on it each year.

G

Buzzy--Bee

However I does depend which visa you are going on. Temporary Residents may well be exempt from income made from foreign investments under the tax changes which are taking place next month.

If you are going on TR, may I recommend you talk to Alan Collett or someone similar before you cash in any investments.



Buzzy

annqldau

How do the Aussies know you have it though and ours is a piddly 13,000 GBP and that's if it ever gets to what it was supposed to be. What happens if it stays in UK bank account on maturity?

You have already been taxed on the money in UK that you put in over the years and we will be taking a loss on what we were supposed to get?

Grayling

Because you are supposed to declare it...failure to do so is tax evasion and illegal.

The amount you are talking about would probably fall within the tax free limit for FIFs anyway.

G

annqldau

But if it's still in the UK anyway do we not still get taxed via bank account in UK anyway?

MartinLuther

If you leave it in the UK you might get away with the tax-evasion route. However, the Aus authorities will know about any payouts worth more than $10k that you convert into $s.

The money made on UK endowments is tax free in the UK so you would have only paid tax on the contributions which are consequently deductable.

Buzzy--Bee

I wonder what the situation would be if you made your endowment policy "paid-up", in other words you ceased contributions.



Buzzy

MartinLuther

You would still get taxed on the gains after you arrive. You can deduct the payments from the gain to reduce the bill so you should check that these pre-payments can still be used as a deduction after you have arrived.