Ltd director and staff - life insurance.Is this a tax relief?

[garnet]

Hi
I am curious - if I make an life insurance of a company's director is this going to be a company's expense for the company. I.e. is this going to be a way to reduce your co's profit?

[Craig@Clarity]

Hi,

Yes it is. You'll need to have consideration as to how the policy is structured. There's potential that it's paid by the company, classed as an expense and also free from any benefit in kind issues. You financial advisor should be able to give you more details.

[Craig at Nixon Williams]

If you want a policy which is fully allowable then it needs to be a 'relevant life policy' - if this meets the criteria of being for the purpose of trade then it will be deductible for CT and will not be seen as a benefit in kind.

Other types of life cover may be classed as a benefit in kind or may not be deductible for corporation tax.

Hope this helps!
Craig

[northernladuk]

Hi
I am curious - if I make an life insurance of a company's director is this going to be a company's expense for the company. I.e. is this going to be a way to reduce your co's profit?

You are not just curious, you appear to be dyslexic as well.

[garnet]

You are not just curious, you appear to be dyslexic as well.

thanks for your useless input - on your bike now...

@useful_input:
what is 'relevant life policy'? I'd think it is all in the policy wording, but one rarely have control on that.

[Craig at Nixon Williams]

A relevant life policy is a type of life insurance policy which in the event of a claim pays out to the beneficiaries through a trust - you will be able to see if it is a relevant life policy as it will be in the policy wording, or even the name of the policy.

Aside from the tax benefit when paying into this type of policy, any claim made on the policy will not be chargeable to inheritance tax.

Hope this helps!
Craig

[kevpuk]

As others have said, best to speak to an IFA in the first instance.

A Relevant Life policy is probably what you are looking at, the idea is that it is not BIK and the LtdCo can pay the premiums.......and any payout will be made according to Trust setup on inception.

Anyway, I am not an IFA so you really would need to speak to one - but I do have a Relevant Life policy, funded MyCo (wife's idea orginally, and she is the primary Trustee......hmmmmmm!)

[northernladuk]

thanks for your useless input - on your bike now...

If you are going to ask free advice it is only common courtesy to make sure you make a bit sense.

Anyway,

Lots of chats about relevant life policies here.. I looked in to it but not being married I was told it wasn't worth doing.

https://www.google.co.uk/search?q=re...hrome&ie=UTF-8

[Craig at Nixon Williams]

I looked in to it but not being married I was told it wasn't worth doing.

I had always assumed that you were married to Northernladyuk...

[TheFaQQer]

not being married I was told it wasn't worth doing.

If you have a family, or think that you might want to have one at some stage, then it's worth considering before you get too old and it gets too expensive.

I tried to consolidate my three policies into one recently, and I was looking at doubling the premiums to get the same cover because my health situation has changed.