• Skip to primary navigation
  • Skip to main content
  • Skip to footer

Top notice bar

Call us on 08000 388799

Avanti Tax Accountants HomepageAvanti Tax Accountants

Bookkeeping, Accountancy and Taxation services

  • Home
  • About Us
  • Our Services
    • Bookkeeping & Accountancy
    • Corporation & Personal Tax
    • Payroll & CIS
    • Company Secretarial Bureau
    • Budgeting, Forecasting & Business Valuations
    • Mentoring & Business Coaching
    • Software & Training
  • Our Accountants
  • News & Insights
  • Send An Enquiry
Home » News & Insights » Terrific Tuesday Tax Tip- Tax efficient Life Insurance

Terrific Tuesday Tax Tip- Tax efficient Life Insurance

Posted on 6th June 2017

image FOR tAX tIP

Tax efficient Life Insurance

If, as an employer, you pay for standard life insurance for a director or employee, it counts as a taxable benefit in kind.

Relevant Life Policies

An RLP runs for the number of years decided on when the policy is taken out.

The policy pays out if the director or employee dies while they are in their job and their employer pays the premiums.

RLPs can also be set up to pay out if the director or employee is diagnosed with a terminal illness.

The amount paid out, which is also tax and NI free, is a multiple of the individual’s current remuneration.

Insurers will often allow directors and employees to convert their employer’s RLP to a personal policy if they leave their job, or move it to a new employer, without the need for fresh medical checks or amended premiums.

Employers can use “relevant life policies” – premiums paid for these don’t count as taxable perks.

Inheritance tax Implications

RLPs can be put in trust. This means a pay-out won’t be part of the individual’s estate and is not liable to Inheritance tax. The insurance company or broker will usually suggest a trust arrangement, but check to make sure.

You can pay premiums to RLPs for directors and employees. These don’t count as taxable perks and the premiums are tax deductible from your business profits. An RLP premium of £800 paid by a company would save £709 in tax and NI compared with a standard life policy.

 

Share this post:

Share on TwitterShare on FacebookShare on LinkedInShare on E-mail

Filed Under: Tax tips

Disclaimer:- The information contained herein is given by way of general guidance only and no action should be taken solely on the basis of the information contained herein. The Avanti Group (UK) Ltd will be pleased to provide further guidance on the issues, and how they might affect you. No liability is accepted by the firm for any action taken without seeking appropriate professional advice

Footer

Navigate

  • Find An Accountant
  • About Us
  • News & Insights
  • Privacy Policy
  • Letter Of Engagement

Our Services

  • Software & Training
  • Mentoring & Business Coaching
  • Budgeting, Forecasting & Business Valuations
  • Company Secretarial Bureau
  • Payroll & CIS
  • Corporation & Personal Tax
  • Bookkeeping & Accountancy

Get In Touch

Tel: 08000 388799
Send us an enquiry

  • Facebook
  • Instagram
  • Twitter
Copyright © 2023 Avanti Tax Accountants · All Rights Reserved
Part of The Maurice J Bushell & Co Ltd Franchise (UK) Ltd · Company Reg: 10407313 and The Avanti Group (UK) Ltd · Company Reg: 04635630 · Created by Purple Hippo
  • So we can contact you to discuss your enquiry
  • So a member of our team from your area can contact you
  • By clicking ‘Send Enquiry’ you agree to receive contact from Avanti Tax Accountants using the details given above. We respect your personal information and your privacy and will not share or sell your information to other organisations. Please read our Privacy Policy for more information.
  • This field is for validation purposes and should be left unchanged.