The plan itself is established and paid for by the company on the life of the individual director or employee. In the event of a claim the proceeds from the plan are paid to a discretionary trust for the benefit of the deceased’s family.
Relevant Life Plans are particularly suitable for small businesses that do not have enough eligible employees to warrant a group life scheme and/or high earning directors and employees who have substantial pension funds and do not want their death-in-service benefits to count towards their lifetime pension allowance.
As the contributions are paid by the company, they are not judged to be a benefit in kind and the contributions paid to fund the plan would normally be treated as an allowable business expense for the company.
The levels and bases of taxation and reliefs from taxation can change at any time and are dependent upon individual circumstances.