Paramount Group - Key Person Insurance

Newsflash

Protecting Tax Free cash

As you generally advise your clients regarding remuneration strategy and more importantly profits extraction it appears, following research with our existing clients that, for those who hold executive/directors pension policies and even those with small self administered schemes, it is now worth a review. This would examine whether it would be advantageous to transfer the existing benefits to a section 32 or section 32A (Block transfer) and start funding a self invested personal pension. For those who have small self administered schemes it is still possible to transfer to a section 32 and have the section 32 self invested, utilising the commercial property occupied by the sponsoring employers company.

Key Person Insurance

The most important asset of any business is the workforce! The success and sustainability of a business may depend upon the contribution made by a small number of “key” people. It may well be the directors or partners themselves who are key to the success of the business. The death, disability or long-term illness of any of them could threaten the profitability of or even the very existence of the business. We therefore feel it is imperative that these individuals and consequently the business are protected.

The business can protect itself by taking out suitable Key Person policies on these individuals, covering death, critical illness and/or long-term illness.

It is also important to take into consideration the tax implications of the setting up of business protection particular with regard to Inheritance Tax and Capital Gains Tax.