Life Insurance Qualifying Rules
Life Insurance Tax Rule: Award Winning Investment Advice
Qualifying rules are rules set out by the HM Revenue and Customs that will allow certain types of life insurance investment plans to pay out benefits either on death or surrender tax free.
If a life insurance investment policy is classed as a qualifying policy for tax reasons it has to fit within certain rules but, if the rules are adhered to, the proceeds of the policy will be completely tax free. The insurance company will still pay taxes on the fund whilst the policy is in force.
Qualifying policies:
For a life insurance investment policy to be qualifying it must meet the following rules:
For life insurance protection policies such as whole of life, endowments or term assurance, the rules may be slightly different.
Maximum Investment Plans (MIP) or Qualifying Savings Plans (QSP)
Non - Qualifying policies:
Non taxpayers and basic rate taxpayers normally will have no tax to pay.
Higher rate tax payers will have a tax liability to pay, top slicing rules determine whether or not tax is payable.
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More qualifying rules:
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