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Child tax crefit


I have a client in receipt of child tax credit, both she and her husband are low earners.  However next year the endowment policy covering her mortgage will mature.  It is estimated that it will pay out about £30K and will pay off the endowment mortgage with a few thousand left.  Am I right in thinking that the whole £30k has to be declared as income, meaning the tax credits will stop?


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Probably not. If this is a normal endowment policy of at least ten years that has run its term the maturity value is not income for the purposes of tax credits. However, if it results in a chargeable event gain e.g. as may happen on an early surrender, the gain is treated as income.

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Hi John R

That's heartening.  The policy was taken out in 1988 for 25 years, no early surrender.  When it comes time to renew the tax credits is it just not mentioned or does it get recorded somewhere else on the form?

Thanks for your help.


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No need to mention it.

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Hi John

Thanks for coming back to me, it'll be reassuring to them.  They are genuine low earners and were very concerned.

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