December 11, 2018Comments are off for this post.

A Contractors guide to trusts and tax efficient Life Insurance

As a Contractor, you could benefit from writing your Life Insurance into a trust. But what is a trust and how do they work?

How do trusts work?

A trust allows you to gift assets to your loved ones. In the case of Life Insurance, it means your partner, children, or anyone nominated in your trust, will receive the policy payout in the event of your passing. But how is this different to normal Life Insurance?

Firstly, you may not have to pay inheritance tax. In some examples, the payout from standard Life Insurance could form part of your estate and taxed at 40% after your personal allowance of £325,000. By writing your Life Insurance into a trust you could avoid paying inheritance tax as the value of your cover is not included in the calculation of your legal estate.

In addition, your family will avoid the long probate process. If you’ve ever experienced waiting for probate to be granted, you’ll know that this is can be a very stressful time. If there is a complicated will (or no will at all), this could lead to a significant delay in the payout. In the UK, the probate process could take up to 6-9 months. During that time, your family could fall into mortgage arrears or other financial difficulties. By writing your Life Insurance into trust however, your family could be able to access the money a lot quicker; all that is needed to access the fund is a death certificate. This means that your family won't have to overcome another challenge in a painful time.

Best of all, as a Contractor, you can expense your personal Life Insurance through your limited company via a Relevant Life Insurance policy at no extra cost.

 

How does Relevant Life Insurance work?

With Relevant Life Insurance, a trust is required to be implemented from the outset and is essential to ensure that the plan can be classed as a business expense. Other benefits of Relevant Life insurance include not having to alter your P11D status; it covers multiple illnesses and the policy can be moved between businesses or into a policy paid from your personal account if your circumstances change.

 


 

Whether you have Life Insurance in place or are wondering how your family could benefit by writing your Life Insurance into a trust, have a conversation with one of our expert advisers.

December 4, 2018Comments are off for this post.

Fun things to do with your family this Christmas


We know that a Contractor’s life is a busy one so with Christmas on the horizon and contracts winding down, you can finally kick back and spend some quality time with your loved ones. To get you in the mood, we’ve put together some fun activities you can do with your family this Christmas.

 

1. Make some delicious Christmas cookies

Who can say no to a Christmas cookie, kitchen mess or not! We’ve found a simple recipe that will give you freshly baked cookies in under 20 minutes. Get the kids involved by having them measure out the ingredients, stir the bowl and decorate! You might be tempted to eat them all but don’t forget to leave one for Father Christmas.

 

2. Watch Christmas movies

Spending the cold winter evening watching Christmas movies is a must. There’s nothing better than getting the family together to watch Buddy the Elf scoff down spaghetti loaded with sugar! Even better, let each family member choose a favourite holiday film. Your wintry evenings will be sorted in no times.

 

3. Go see the Coca-Cola Christmas truck

Once the Coca-Cola Christmas advert airs on tv, the countdown to Christmas begins. Each year, the red Coca-Cola truck travels around the UK visiting towns and cities and handing out drinks. Make a day of it and take your children to see the iconic truck. Have a look here, to see if the truck is coming to a place near you.

 

4. Make homemade Christmas ornaments

You may already have your tree up and decorated but make the tree extra special this year by adding on homemade Christmas baubles. You can reuse old baubles by painting over them or make retro paper tree ornaments by following these easy steps.   

 

5. Have a hot Chocolate party

There’s no wintry blues a cup of loaded hot chocolate can’t fix. A great Christmas eve idea is to set up a hot chocolate buffet so the kids can personalise their drinks. You can lay out the toppings so they can pick and choose which ones they would like. Some ideas include whipped cream, marshmallows, crushed candy canes and chocolate chips.

 


 

Here at Relevant Life Expert, we know much much your family means to you. It’s the same for us! Of course, it’s memories like those listed here that can last a lifetime, which is why we make it our priority to help Contractors understand the ways they can protect their families if anything were to happen. Many Contractors we speak to already have Life Insurance in place, but if you have a limited company you could be making additional savings by paying for your Life Insurance through your business as a tax-deductible expensive. This is called Relevant Life Insurance.

To see how you could have money while protecting your family, speak to one of our advisers.

November 22, 2018Comments are off for this post.

5 facts Contractors should know about Relevant Life Insurance

We talk to Contractors every day, so we know that your biggest priority in life is protecting your loved ones. But when you work for yourself, you can lose out on the benefits, such as sick pay and death in service, that ‘traditional’ employees provide. As a Contractor, if you own a limited company, and already have life insurance in place, you should consider switching to Relevant Life Insurance as it’s tax efficiency could save you money. We have found the top 5 facts about Relevant Life Insurance that all Contractors should know.

5 facts about Relevant Life Insurance

 

1. Relevant Life Insurance is taken out by the limited company rather than the Contractor

Unlike standard life insurance that you pay for out of your own pocket, the monthly premium is paid for by a limited company and will cover a particular employee such as yourself. If you were to unfortunately die, the lump sum will be paid to your beneficiaries.

 

2. It’s not a benefit-in-kind

You do not have to declare Relevant Life Insurance on your P11D at the end of the tax year as it is not treated as a benefit-in-kind. It is considered a company expense, so you won’t lose any of your tax-free allowances and your company will enjoy the corporation tax relief on the premiums.

 

3. No income tax and, usually, no inheritance tax on the payout

As well as being tax efficient to pay for, Relevant Life Insurance is tax efficient when paying out. There is no income tax to pay as it is classified as a business expense and, when placed into a trust correctly, your family could benefit from not paying inheritance tax if the worst was to happen.

 

4. Your lifetime allowance for pensions is not affected

Relevant Life Insurance does not count toward your pension lifetime allowance. You can accumulate up to £1.03 million (for tax year 2018/19) into your pension pot before you have to start paying tax. Unlike lump sum payments from a pension scheme, payments made from Relevant Life Insurance are not included in your pension lifetime allowance.

 

5. No payout if the policy is cancelled

Because Relevant Life is a form of insurance, Relevant Life cover will stay intact for as long as your limited company keeps up the payments and the conditions of the policy is not breached - if you change your mind this is no surrender value.

 

The are endless benefits to switching your life insurance to Relevant Life Insurance but it is important that you select a policy that is right for you and your loved ones. If you are looking for an expert adviser who understands Contractors, we can help.

October 17, 2018Comments are off for this post.

The difference between Relevant Life Insurance and ‘normal’ Life Insurance

If you have ever wondered the difference between Relevant Life Insurance and normal life insurance - you wouldn’t be the first! We aren’t delusional though, ‘life insurance’ is not the most exciting topic to spend time researching and understanding. So we’re going to keep it brief…

Life Insurance

Life insurance does exactly what it says on the tin. It’s a product that insures your life. Essentially, in the worst case scenario where you are in a critical accident or become ill and die, your loved ones or chosen beneficiaries would receive a pay out.

The benefit of Life Insurance:

  • It protects your loved onesIf you contribute an income to your family home (a mortgage, bills, or lifestyle costs) the financial implication of your death can be catastrophic. Life insurance ensures that all your debts are cleared, like your mortgage and credit card, as well as replacing income that would have been there if you were still alive. The kind that covers your bills and lifestyle

Relevant Life Insurance

Relevant Life Insurance does exactly the same as ‘normal’ life insurance except, that it was designed as a benefit for Contractors and ltd Company Directors. It is essentially a tax efficient way to pay for life insurance; as opposed to paying for you monthly cover through post-tax income, Relevant Life Insurance is paid for through your company expenses - saving you money.

The benefits of Relevant Life Insurance:

  • It protects your loved onesJust as with ‘normal’ life insurance, your family will be protected (which is why we want it in the first place!) but there is more...
  • You save money: If you are eligible to pay for your life insurance through your business, you could save money. See just how much by watching this short film
  • It’s not treated as a benefit-in-kind: Which means you don’t have to include it as a P11D benefit or pay tax on it

If you want any more detail on how to make your life insurance cover tax efficient as a Contractor or limited company Director, do get in touch.

0203 854 1500
advice@relevantlifexpert.co.uk

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