You will probably have taken out life insurance to protect your families in the event of you dying prematurely, so that your family can maintain their current lifestyles, if you are not their providing income for the home.
But did you know there is now a more tax efficient way to provide that insurance protection.
It is called a Relevant Life Policy and can provide you with tax-efficient life cover.
A relevant life policy may be right for you if:
- You are a company director
- You would like to have a death in service scheme in place, but do not have enough employees to have a company group scheme
- You need more life cover than your company scheme provides
How does it work?
As your company pays the premiums for a Relevant Life policy, they are usually considered to be allowable deductions and are not a benefit in kind.
- This means that HMRC treats the premiums as a business expense
- There is no national insurance or income tax liability on the premiums
- The policy benefits are paid tax free to the nominated beneficiaries
Comparing the cost
By arranging a Relevant Life Policy, income tax and both employee and employer national insurance contributions will be saved. By the time you take into account income tax and both employee and employer national insurance contributions, the savings can be as much as 49%.
Always consult a qualified financial adviser before making any tax or investment decisions. The above article is only for guidance and should not be taken as advice. If you would like to talk to me about getting your future investments on track please contact me.
Contact Martin Dodd on 01902 742221 or email him at [email protected] if you would like talk about money issues.
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