Why Company Directors Love Relevant Life Insurance
If you run your own business and have personal life insurance in place to financially protect your family, did you know that you could make a substantial
tax saving on your premiums by taking out what is called ‘relevant life insurance’?
Company directors paying 40% personal income tax could save up to 52% on their life insurance premiums (up to a 36% saving for those on a 20% tax rate) when compared to having personal life cover in place. This means that someone with a £50 a month personal life policy could save £7,800 over a 25-year term, by taking out relevant life cover instead.
Relevant life insurance is the same in essence as the most common types of life cover sold in the UK – level-term and decreasing-term life cover – in that it pays out a lump-sum benefit if the person covered passes away within a set period.
However, the difference with a relevant life insurance policy is that it is paid for by your business, meaning it is eligible for tax savings. The monthly premiums are tax deductible as a trading expense, and because they are not treated as a P11D benefit there aren’t any implications on the amount of personal tax you pay.
If you or your clients would like further information please contact Scott Robinson, on 01548 856444 or email email@example.com .
Sabre Financial is a trading title of Sabre Financial Planning Ltd. Sabre Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority.
By Sabre Financial | Tuesday, November 19, 2019