The Relevant Life Plan - Tax Efficient Life Cover
A Relevant Life Policy is a tax efficient way of setting up life insurance.
To qualify, you need to be employed by a business and for that business to pay for the premiums for your life insurance.
If you take a relevant life policy, there will be no benefit in kind charge to the life assured.
As the video explains, the business can apply for corporation tax relief on the premiums subject to the wholly and exclusively rules. To find out more about this, please contact one of our Business Protection Experts at Avenir.
If you are an accountant, solicitor or are interested in the wording behind the legislation that allows The Relevant Life Policy to be possible, please click here.
Savings Example
Below you will find a table showing you the potential annual savings a Relevant Life Policy can give you on a premium of £1,000/year (£83.33/month). In this example, it is a massive 49%.
This is why at Avenir Financial Solutions Ltd, we call The Relevant Life Policy, Tax Efficient Life Cover.
*Assumes that corporation tax relief at 20% has been granted under the ‘wholly and exclusively’ rules. In both cases we’ve assumed a payment of £1,000 each year for the life cover on an employee who’s paying income tax at 40% and employee’s National Insurance at 2% on the top end of income. We’ve also assumed that the employer is paying corporation tax at the small profits rate of 20% and will pay employer’s National Insurance at the contracted-in rate of 13.8%.
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