Had the policy been purchased in more than one name the CGT allowance would have exceeded the gross profit and no tax would be due. To calculate the Chargeable Event 1. From the maturity figure subtract the total of all premiums that have been paid since inception of the policy. Divide this figure by the number of years the policy has run to maturity. Add this final figure to the taxable income for that year, if the investor is still within the basic rate, no tax is payable.
Tax is applicable to the maturity figure less all premiums paid since the inception of the policy.
For a policy purchased on 1st January 2000 for 6,000 with original premiums of 40 per month altered to 80 per month and maturing on 1st January 2006 at 24,000. The A1 Policy Shop Ltd cannot be held responsible for providing tax information and prospective purchasers should seek independent advice before purchasing a policy. A Member of The Association of Policy Traders.