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It's not only individuals who take out insurance. JOHN WOOLLEY explains forthcoming changes to the taxation of life assurance policies held by companies
KEY POINTS
- Why does a company take out a life assurance policy?
- Is it a trading transaction or an investment?
- The historic treatment of pre and post-14 March 1989 policies
- The Pre-Budget proposals
- The impact of the loan relationship rules
- A practical example of the new rules
When a private limited company effects a life assurance policy a number of tax implications will need to be considered.
For example how will the ownership of the policy as an asset affect inheritance tax business property relief and depending on the new rules post 5 April 2008 the availability of tax relief on the disposal of shares in the limited company?
These issues are not discussed further here. What we will concentrate on in this article...
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