Is your life assurance relevant? Recent development in the life assurance market now allows personal life cover through businesses & corporation tax relief on those premiums.
The vast majority of company directors understand the importance of protecting their business from the untimely death of a director or key member of staff. Whether it’s safeguarding the continuity of their business or providing sufficient funds to purchase the shares of a deceased co-director, the cost of life cover is an allowable business expense and can be offset against corporation tax.
However, what most directors do not realise is that a recent development in the life assurance market now allows them to set up their own personal life cover (for mortgages and family protection) through their business and gain corporation tax relief on those premiums as well.
Relevant Life Cover is bought by the company and written in trust so that the proceeds are paid to the Director’s family and dependents. The costs can be totally offset against corporation tax and the plan is not treated as a benefit in kind. Compared with paying for your own life cover out of post-tax income the cost saving can be anything up to 49%.