Tax Efficient Relevant Life Cover for Contractors
Relevant life cover is a tax efficient way to supply a director or employee life cover up to value of your choice. So, this could just be enough to cover the mortgage so your loved ones are not left struggling or with enough to cover their cost of living or more on top.
The company pays for the policy, so it comes from the gross earnings and not net of business and personal tax, and it doesn’t attract a benefit in kind on the P11D like ordinary life cover. You then also get the Corporation Tax saving as it will be an expense to the business.
The other benefit is that nominated beneficiaries decided by the person covered, will receive the lump sum tax-free, as the payment comes from a trust. So not only are the payments for the policy tax-free, the lump sum is free from inheritance tax too!
Relevant life cover has made life insurance affordable for the independent contractors. You then have peace of mind your family has that security if you were not be around.
The majority of contractors are shocked at the cost of the policies for the amount of cover you get, and the earlier you get it the cheaper the premium.
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