Relevant Life Plan

Relevant Life Cover policies are individual life cover policies. They’re designed to enable employers to offer tax-efficient death-in-service benefits to their employees outside of a registered group life scheme. They are also used for high-earning employees who have substantial pension funds and want their death-in-service benefits to sit outside of their lifetime allowance.

Other tax advantages of Relevant Life Cover:

The payments made won’t form part of the employee’s annual pension allowance.

The premiums aren’t normally subject to income tax because they’re not assessed as a benefit in kind.

The premiums can be treated as an allowable expense for the employer in calculating their tax liability, as long as the local inspector of taxes is satisfied they qualify under the ‘wholly and exclusively' rules.

In most cases the benefits are paid free of inheritance tax because the policy is written in trust and the benefits are paid through that trust.

The policy is owned by the business and the business pays the premiums. The life assured can be a key person within that business. The policy is written in trust for the dependants of the life assured.