Relevant Life Cover

A Relevant Life policy is a single life, stand-alone death-in-service plan, providing benefits on an individual basis.

Tax advantages for directors, shareholders and employees of small limited companies
Premiums are not taxed as benefit in kind
Available for spouse’s or employee’s cover, if they receive remuneration from the business by way of salary, dividend or both
Premiums are an allowable company expense for corporation tax purposes for the employer
Cover ranges from 15-30 times annual salary and/or dividends, depending on age. Younger people can apply a higher factor of salary (but usually earn less so this creates consistency)

Although the company pays the premiums, they are not taxed as a benefit in kind - which can offer huge savings, especially for a higher rate taxpayer.
So while it's mainly aimed at high earners, a Relevant Life Policy can be suitable for any employee. What’s more, the payments are treated as an allowable expense for the employer in calculating their tax liability.
This means it's also particularly suitable for small businesses that don't have enough eligible employees to warrant a group life scheme.
HMRC consider the death benefits paid under a Relevant Life policy to be ‘excluded’ meaning they are excluded from Income and Capital Gains Tax.

Current tax law

This is based on our understanding of current UK tax law and may change in the future