How to pay for a life insurance policy without incurring Benefit-In-Kind tax?

If your company pays for a normal life insurance policy, this is subject to NI 13.8% and tax at either 20% or 40% depending on their earnings, as well as additional accountancy costs for P11d forms.

Special policies are available called Relevant Life Policy, which are specially worded so they qualify for Corporation Tax Relief but not Benefit-In-Kind tax.

If you already have a personal life insurance policy and choose to cancel/swap it, you could save further personal tax by drawing less dividend which can save you up to 32.5% dividend tax.

Speak to your financial adviser for further details on the policy or I can refer you to one.