[av_heading tag=’h3′ padding=’10’ heading=’Relevent Life Insurance’ color=” style=” custom_font=” size=” subheading_active=” subheading_size=’15’ custom_class=”][/av_heading] [av_codeblock wrapper_element=” wrapper_element_attributes=”]

relevant life content

HATS OFF

TO THE TAXMAN

If you own a small business there’s a smarter way to buy life cover

for yourself and your key employees.

With a relevant life policy the business makes the payments, not the person who’s covered.

That means you won’t pay any national insurance contributions or income tax

on the premiums but you still get the beneÄts of corporation tax relief.

How a relevant life policy can cut company costs
Premium		Ordinary life cover	Relevant life policy
Premium		£1,000	£1,000
Company gross cost	Employee’s National Insurance contribution at 2%	£34	Nil
	Income tax @40%	£690	Nil
	Employer’s National Insurance contribution at 13.8%	£238	Nil
	Total gross cost	£1,962	£1,000
Company net cost	Corporation tax relief at 20%	£392	£200*
Net cost		£1,570	£800*

Now that looks like a head start for your business.

Remember, this is based on our understanding of current tax law which could change in the future.

Source: *Assumes that corporation tax relief at 20% has been granted under the ‘wholly and exclusively’ rules. In both cases we’ve assumed a payment of £1,000 each year for the life cover on an employee who’s paying income tax at 40% and employee’s National Insurance at 2% on the top end of income. We’ve also assumed that the employer is paying corporation tax at the small profits rate of 20% and will pay employer’s National Insurance at the contracted-in rate of 13.8%

To find the best way to protect you and your family, talk to your financial adviser today.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London EC3V 0RL.

Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority and introduces Royal London’s customers to other insurance companies. The firm is on the Financial Services Register, registration number 302391. Registered in England and Wales number 4414137. Registered office: 55 Gracechurch Street, London EC3V 0RL.

P9B0115

[/av_codeblock]