Relevant Life Cover
Relevant Life is a life insurance policy available to employers to provide an individual death-in-service benefit for an employee. It can help smaller businesses attract and retain high-calibre staff by offering them attractive benefits packages that are also tax efficient. It can also be a tax-efficient way for shareholder directors to take out life insurance.
The following information is based on our understanding of current legislation, taxation law and HM Revenue & Customs (HMRC) practice, which may change.
Tax Benefits
There can be tax benefits for both the employer and employee.
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Employer benefits:
- Corporation tax relief (so long as the premiums are wholly and exclusively for the purposes of the business).
- No National Insurance contributions to pay on the policy payments paid to fund the Relevant Life policy.
Employee benefits:
- No National Insurance contributions to pay on the policy payments paid to fund the Relevant Life policy.
- The policy payments won’t be taxed as a benefit in kind.
- Policy payments and benefits don’t count towards annual or lifetime pension allowances.
