[Question] Company Payment of Director Life Insurance Policy

[Ola]

Hi All,

I need assistance with life insurance policies for our directors. Director A has a life insurance policy with Hollard, which the company pays for. Since the policy is in director A's name, and it has been since before the company existed, the premiums paid on behalf of the director (from the company bank account) are recorded as part of the directors salary from the very start.

Director B however recently signed up for a life policy with Outsurance, which is also the company's insurer. The past 2 or 3 months this policy has been paid via debit order from the company bank account, and I (stupidly) accounted for these payments by including them with the monthly insurance premium for the company insurance.

As I understand it, I was actually supposed to account for these life insurance premiums as a salary to director B as well? Because... if the company pays for it, does it not become a fringe benefit and would therefore need to be accounted for differently?

I'm not all that clued up with fringe benefits and I'm very unsure how it works... Our employees are paid weekly (except the directors), so apart from some union & other organization fee's, the only other deductions I really ever have to worry about are things like staff loans...

Any and all comments in this matter are welcome.

[JohnMitten]

Good day,

Just joined this forum, have you been assisted with this request?
When it comes to buy&sell polices for directors there are tax implications in the event of a payout to the other director if the payment structure, loan account is not paid for by the actual owner of the policy/beneficiary if this is a buy&sell policy. if this is just a personal life policy but paid for the by the company then there are other ways to structure it as in part of salary or part of a company, depending on the amount of salary and premium. all this to reduce the tax bill now and at claim stage.
if you are interested I am happy to provide you with the information you are looking for.