Hi, I just want to check one aspect about the taxation of immediate needs annuities. I understand that is payments are made to local authorities or registered care providers the benefits are tax free for the policyholder. If the policyholder receives payments in hand are these still tax free or are they taxed as general annuity business? Thanks
According to the HMRC website: Any payment, or any part of any payment, made directly to the insured person or persons other than a registered care provider cannot qualify for the exemption, even if it is from a policy which qualifies as an Immediate Needs Annuity. Any such payment or part of a payment has therefore to be treated as taxable income of the insured person. More details if you want them at: http://www.hmrc.gov.uk/manuals/iptm/iptm6210.htm Hope this helps - good luck. Steve
