You may also have made a gain that is only taxable when your policy ends. This is because in each insurance year you can withdraw up to 5 per cent of the premium paid into a single premium policy without a gain happening in that year . The 5 per cent includes regular pay-outs or withdrawals. If, for example, you do not make any withdrawals in an insurance year , the full amount of the 5 per cent ‘annual allowance’ is carried forward. This means that in the second insurance year , if you have not made a withdrawal in the first insurance year , you can.