How can I save up to 49% on my life insurance if I’m a business owner and reduce my corporation tax bill at the same time?

How can I save up to 49% on my life insurance if I’m a business owner and reduce my corporation tax bill at the same time?
 
The answer, pay for your life insurance through your business rather than personally. This is called ‘relevant life cover’.
 
Many people in the UK do not have life cover and the ones that do are often paying for it from their own pocket.
 
It would often be more beneficial to let your company incur the cost of the cover and reduce your corporation tax at the same time.
Relevant life cover is a life insurance policy that is owned by your business but covers the chosen employee / owner in the event of a death. This means that it is paid to beneficiaries outside of the estate, free of inheritance tax.
It is designed to provide financial protection to business owners and their employees.
This type of insurance can provide a tax efficient way to provide for the business owner’s family in the event of their death.
The reason is, it is a deductible expense against corporation tax and not considered to be a benefit in kind by HMRC. Like with any tax advice, it is always worth discussing this further with your accountant.
Company owners enjoy taking advantage of these policies as they put a financial safety net in place for their loved ones whilst reducing their companies tax bill.
 
With the policies being paid from pre-tax company money, in some instances, it even reduces what a director needs to pay them self if they are paying large premiums for a life insurance policy from their personal bank account.
 
Significant amounts can be insured depending on the insurer, sometimes 20 times their salary or more. The premiums are the same as they would be with a standard policy and with some plans, you can switch back to personal ownership if the company was to close.
Legal and General quoted that “over 70% of business owners were not aware of relevant life insurance and once told, 70% of these people wanted to know more about them”.
If you want to find out more about relevant life cover and what it may cost to put protection in place to cover your loved ones, talk to Kerr & Watson today.
Website: Kerrandwatson.co.uk