Relevant Life Protection

What is a Relevant Life Plan?

A Relevant Life Plan is taken out by a company on behalf of an employee. It pays a lump sum if the employee dies during the term and may also provide a payout following a qualifying terminal-illness diagnosis, subject to the policy terms.

Potential benefits

For the employer

Premiums may be treated as an allowable business expense when calculating tax liability, subject to HM Revenue & Customs rules and the purpose of the arrangement.

For the employee

Premiums are paid by the company and will not normally count towards pension annual or lifetime allowances. Benefits may be paid free of inheritance tax when the plan is written under a suitable discretionary trust.

Who may benefit?

• Small businesses that do not qualify for a registered group life scheme
• Employees or directors seeking death-in-service benefits outside a group scheme
• Members of a group scheme who need benefits beyond its rules

Relevant Life Plans are generally not suitable for the self-employed, equity partners or members of limited liability partnerships. Specific conditions must be met for tax concessions to apply.

HM Revenue & Customs practice and the law relating to taxation are complex, depend on individual circumstances and may change. The plan has no cash-in value and cover will lapse if premiums are not maintained.