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?
Tax treatment depends on individual circumstances which are subject to change.
Your staff makes your business work and if they are key to the success of your business then 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.