Did you know that arranging life cover for company directors and high earning employees can be treated as a legitimate business arrangement and, with the company paying the premiums, there is also the potential of reducing the business’s tax liability?
A policy can be taken out and paid for by your company or employer and put in trust for your loved ones or any other chosen beneficiary. This is known as Relevant Life Cover.
Relevant Life Cover provides a lump sum paid to a person’s chosen beneficiaries in the same way a personal life insurance policy would.
It is of particular interest to company directors, who could benefit as follows:
|•||Pay for their life insurance through their business|
|•||Reduce their company’s corporation tax|
|•||Not taxed as a benefit in kind|
|•||No NI payable on the benefit|
|•||Typically no inheritance tax when placed in trust|
|•||No P11D disclosures|
|•||The premiums do not count towards their annual allowance for pension contributions|
|•||The life cover benefits do not count towards their lifetime allowance for pension savings|
Please contact us for more information; it may also be worth speaking to your IFA about this as part of your next financial review.