Protecting Key Persons

Every business has staff, that is crucial to its profitability, and you may find you have just a few people within your business that contribute significantly to its success. This may be you, your business partners or directors, or perhaps specialist staff or sales people. They each play an important role. Their loss could have a significant impact on the continuing profitability of your business and you may therefore need to insure against loss of profits, the cost of replacing a member of staff, or difficulty meeting loan repayments. This is why your business should have insurance in place for key staff. It ensures that if they die, suffer a critical illness, or are unable to work through long term ill health, the business benefits from financial payments to compensate for the inevitable impact these events would have on the business to continue operating profitably, or even to survive.

Directors or partners share protection

The loss of a business partner, or shareholding director due to death or serious illness can create ownership problems for your business. Without suitable cover in place the surviving partner or director may find that control of the business is lost. A business partner’s family may wish to run the business or sell their share to a third party, which may not be desirable for the surviving partner. We can ensure that through insuring each party, sufficient funds are available for surviving partners or directors to enable purchase of the co owner’s share of the business in the event of their death. Importantly, through our professional relationships with solicitors and accountants, we can also ensure that suitable option agreements are put in place to allow ownership of the business to continue in the most desirable way.

Relevant Life Plan

Are you paying over the odds for your life assurance?

We can help directors of limited companies make up to 60% tax savings on gross life assurance premiums with no tax payable by the employee. If you are a company director, the owner of a small business with just a few employees, or even a high earner who doesn’t want their pension lifetime allowance eroded by any death in service benefits, a relevant life policy may be the solution. A Relevant Life Plan is a life assurance plan, paying out a set amount on the death of an employee. It is paid for by your company for the benefit of an individual, and must be written in trust for their dependents. We can arrange individual life assurance plans that pay an amount upon death of the employee, up to 15 times income. This can include salary, regular dividends paid in lieu of salary and any benefits in kind.  An employee may be the director of a company, an equity partner’s member of staff, or a self employed person’s member of staff.You may wish to offer this protection to an important member of staff, as an added benefit in recognition of their work.

So how can you save all this tax?   A limited company can offset the life assurance premiums against its liability to corporation tax, great news especially if you own the company and are also the life assured!  Instead of the premiums being treated as paid from an employee’s income and therefore attracting income tax and national insurance,  premiums paid by employers aren’t treated as a benefit in kind. They therefore incur no charge to income tax or national insurance for the employee. FSC Investment Services Ltd can compare costs from the whole of the market to ensure you have the most competitively priced plan, and can arrange it correctly to benefit from the allowable tax savings. We also ensure benefits are payable through an appropriate trust so they don’t form part of the employee’s estate for Inheritance Tax purposes.

FSC Investment Services Limited is authorised and regulated by the Financial Services Authority.