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This type of scheme covers your employees for a multiple of their salaries should they die in service. The 'multiple' is chosen by the Company.
This type of scheme has to be paid for by the employer with no contribution by the employees.
The taxation of these types of schemes is as follows :
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Employer
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Contributions paid on behalf of the employees are an allowable business expense
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Employees
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Employer contributions are not treated as a benefit in kind. |
As far as the payment of the benefit is concerned the lump sum is paid to the Trustees of the scheme and then the beneficiaries free of tax.
The approximate cost would be 0.5% per annum of the payroll for up to 4-x salary for each member. The majority of medium sized employers provide this as a standard employee benefit.
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