Professional Mortgage Advice

Relevant Life Cover

Providing peace of mind for your staff will be of benefit to both them and your business. A tax-efficient relevant life plan can help to attract and retain the best people. This in turn can help your business to thrive.

Many businesses today recognise that the biggest asset exists in human resources. Finding and retaining the best staff means that your business needs to offer something special to your employees to ensure that they feel wanted and cared for.

A Relevant Life Plan is a tax-efficient life insurance policy available for companies where there is an employee/employer relationship. It offers a death-in-service benefit to its employees (including salaried Directors). The policy is set up by the company and pays out a lump sum on the death (or diagnosis of a terminal illness) of the insured employee.

Relevant Life Plans can be of benefit to high earning individuals, such as Directors, as premiums could be classed as a business expense and so are likely to be an allowable deduction for Corporation Tax purposes.

The plan is paid for by the employer and must be written in Trust before the policy can start. Therefore, the premiums are usually considered a genuine permissible business expense by HM Revenue and Customs (HMRC). In the event of a successful claim the benefits are paid to the trustees who are then responsible for their distribution to the beneficiaries of the employee.

Relevant Life Plans are written in trust for the benefit of the employee’s dependents. This means that it would be paid outside of their estate, which could be beneficial from an Inheritance Tax perspective.

Please note that we do not offer advice on pension or taxation matters. You should contact your accountant or other suitably qualified person to confirm whether this product is appropriate for your circumstances.

These plans have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.

The Financial Conduct Authority does not regulate tax advice or Trusts.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

As with all insurance policies, conditions and exclusions will apply.