As a company director or business owner, you’ll understand the need for careful financial planning. However, many business owners are, understandably, busy running their businesses and often don’t take the time to review their personal finances to the same level. Working with company directors and business owners means that the Beaumont team understand the specific financial complexities and needs of individuals whose finances may be closely linked to those of their business.
All businesses should plan for any unfortunate events that may arise, such as the death of a company director or shareholder, as all remaining parties need to know that they can continue to run the business with the minimum of disruption.
Beaumont offers unbiased, bespoke independent financial advice and solutions that will protect you and your business. We carry out an initial assessment of the potential risks that your business faces and the types and amount of cover that you will require. We can then discuss the most appropriate risk management and insurance solutions for your company, while ensuring they are implemented in the most tax efficient and beneficial way.
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A specific example of how Beaumont could potentially help you to protect your business, depending on your specific circumstances, is Relevant Life Insurance. In a nutshell, it’s standard term life insurance paid for by the business that pays out directly to the covered individual’s beneficiary.
Relevant Life Insurance is often appropriate for business protection as:
- It is paid directly from the business as an allowable expense against corporation tax and is not a P11D benefit – so no income tax is paid either.
- It is paid directly into a trust for the covered person’s beneficiary – so it is outside of the covered person’s estate, meaning there is no inheritance tax to pay. This also means there is no delay in getting the money on the covered individual’s death, and, for example, your partner and children could receive a lump sum payment with no tax to pay, retain property to generate income and provide a buffer against complications of business ownership issues and accounts being frozen.
- It’s effectively 40% cheaper for a basic rate taxpayer and 49% cheaper for a higher rate tax payer.
- It can also have terminal illness (paid out on diagnosis) and accidental death cover attached, which are added benefits.
- Cover can continue as long as the individual pays at least £1 through PAYE through a salary, but dividends are also included in the calculation to define the amount of cover available. This can be up to 30 times salary plus dividends dependent on age and the provider selected.
- It can run up to the age of 75 but policies usually begin between age 17 -71.
- Premiums can be guaranteed or reviewable.
- The benefit won’t form part of the employee’s lifetime allowance.
- The premiums paid won’t impact the employee’s annual allowance.
Overall, Relevant Life Insurance is a highly tax efficient way of providing a large amount of cover for a relatively low monthly premium.
This overview does not constitute advice and is intended to give an example of the advice we can provide to protect your business. The features of Relevant Life Insurance detailed above are correct as at October 2016 and can vary depending on individual circumstances and the provider selected.
To find out more about whether Relevant Life Insurance is right for your own personal circumstances, please contact Matt – [email protected] – or any of the Beaumont team.