LIFE ASSURANCE WITH TAX RELIEF
Usually, where a company director takes out life assurance cover, the premiums have to be met by the director himself, therefore out of taxed income. A policy can however be taken out and paid for by your business and put in trust for your dependants or desired beneficiaries to provide a lump sum on death in the same way as a personal policy would work. Under a Relevant Trust however, the Company pays the premiums which are usually considered as an allowable expense and not treated as a benefit in kind.
There are some restrictions as the policy can be for a specified term only up to age 75 maximum, and the maximum cover is a multiple of remuneration (salary, bonus, benefits, dividends) - 20 times up to age 39, 15 times if aged 40-59, and 10 times if aged 60+.
The attraction however is the tax relief on premiums.
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