A Relevant Life Plan or Policy is applicable to you if you are a Company Director or an employee of a Company.
It does not apply to the self-employed or partnerships.
This is an insurance policy taken out by an Employer to provide death-in-service life assurance cover for an employee or director.
In the event of a pay-out the life assurance will be paid, to the beneficiaries, for example the family, of that person. Not to the Company.
This means any director or employee who is currently paying for life assurance out of their own pocket, could have the policy organised through the Employer.
The employer can treat the cost of the policy as a taxable expense and there is an income tax and national insurance benefit.
And the result of all of this is to reduce the overall cost.
Here is a comparison between an individual paying for their own policy against the same policy being paid for by the employer. This shows how the tax treatment works for a basic rate tax payer, the cost savings will be even greater for a higher rate tax payer.
This is an area where there are several technicalities to be aware of and deal with, however at a simple level this is a highly effective way for people in the right situation to organise their life assurance in a more tax efficient way.
At TT Wealth we can help you investigate if a relevant life policy is right for you and take you through the technical side of this to ensuring you meet all the legislation requirements.