An alternative to traditional death in service
If you’re a company director and you have life insurance in place to protect your family, you could be paying more tax than you need to.
Relevant Life Policies are a way of providing death in service benefits on an individual basis, no matter how small your business is. They are not classed as a ‘benefit in kind’ so no tax is payable on the premiums, unlike personal policies that are paid for by your business.
In most cases, the benefits are paid free of inheritance tax – provided the benefits are payable through a discretionary trust.
What are the benefits?
Life Assurance plans typically have no cash in value at any time and cover will cease at the end of term. If premiums stop, then cover will lapse. Tax treatment depends on individual circumstances which are subject to change.
When your staff are key to the success of your business, they are a valuable asset. One question, what would it cost your business if they were to suddenly die?
Losing a major shareholder or partner can cause serious problems, not only within the business.