Relevant Life Plan

A relevant life plan is a death-in-service policy paid for by the employer. Unlike group life schemes, it's suitable for single employees or directors (including those in one-person companies). Premiums are a tax-deductible business expense, the payout is tax-free, and there's no benefit-in-kind charge, making it one of the most tax-efficient ways to provide life cover.

Tax Advantages

• Premiums are a tax-deductible business expense (corporation tax relief)
• No P11D benefit-in-kind charge for the employee
• No National Insurance on premiums
• Payout is tax-free and outside the estate for inheritance tax
• Doesn't count towards the annual or lifetime pension allowance

Who Can Benefit?

• Company directors (including sole directors of limited companies)
• Employees who are higher or additional rate taxpayers
• Business owners who have exceeded their pension lifetime allowance
• Small companies that can't justify a group life scheme
• Anyone currently paying for personal life insurance from taxed income

Compared to Personal Life Insurance

A director paying 40% income tax and buying £500,000 of life cover personally might pay £50/month from taxed income, costing the company approximately £83/month in gross salary. A relevant life plan for the same cover might cost the company just £50/month with full corporation tax relief, a saving of over 40%.