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. In most cases, the benefits are paid free of inheritance tax if they are paid through a discretionary trust.
Who are these policies suitable for?
- company directors who want the company to pay for their life cover and offset this against tax;
- small businesses that do not have enough eligible employees to warrant group life schemes;
- directors of small limited companies who may be thinking of putting key-person cover in place;
- and high-earning employees or directors who have substantial pension funds and do not want their benefits to form part of their lifetime allowance.
They are not suitable for the self-employed or equity partners, although their staff could be covered.
How much cover can I have?
You can apply for cover up to £5m. The maximum cover is 15 times the employee’s/director's remuneration. This can include salary, regular dividends paid in lieu of salary and any benefits in kind. There are some limits to qualify for tax concessions.
For more information about our services or to speak to one of our consultants, simply complete our enquiry form, send us an email or call our Cambridge office on 01223 720209 or our Norwich office on 01603 692733.