Life insurance payout - Form 11?

cat_xx

Hi,

I was just wondering if life insurance payments need to be disclosed on a Form 11 and in a capital account?

Thanks!

Lockedout2

Have you claimed the premiums against income to bring it into a charge to tax.

cat_xx

Lockedout2 wrote: »

Have you claimed the premiums against income to bring it into a charge to tax.

I'm not quite sure what you mean, the payout was received after a death.

L1011

Lockedout2 wrote: »

Have you claimed the premiums against income to bring it into a charge to tax.

It would be rather unheard of, and rather suspicious, for the beneficiary of a life insurance policy to have paid the premiums.

nompere

L1011 wrote: »

It would be rather unheard of, and rather suspicious, for the beneficiary of a life insurance policy to have paid the premiums.

Keyman insurance, which is just a dressed up form of life insurance, is typically paid by the company that will receive the proceeds.

I know that it may be set up in other ways, but I know I always advise clients paying that insurance to claim the premiums as an expense, accepting that they may then have to pay tax on the proceeds.

The_Bot

nompere wrote: »

Keyman insurance, which is just a dressed up form of life insurance, is typically paid by the company that will receive the proceeds.

I know that it may be set up in other ways, but I know I always advise clients paying that insurance to claim the premiums as an expense, accepting that they may then have to pay tax on the proceeds.

Keyman insurance is to cover the risk of loss of profits to a company as a result of the death, incapacity etc of key employee. It's really insuring a business risk rather than plain old life assurance, it just so happens the persons life is the key underlying factor.

As a matter of interest, which section of TCA 97 enables the deduction of life assurance previous against income? These days most life assurance policies are taxable under the gross roll up regime (i.e. Tax free roll up during live of the policy with exit tax applied by insurance company on maturity).

barneystinson

The_Bot wrote: »

Keyman insurance is to cover the risk of loss of profits to a company as a result of the death, incapacity etc of key employee. It's really insuring a business risk rather than plain old life assurance, it just so happens the persons life is the key underlying factor.

As a matter of interest, which section of TCA 97 enables the deduction of life assurance previous against income? These days most life assurance policies are taxable under the gross roll up regime (i.e. Tax free roll up during live of the policy with exit tax applied by insurance company on maturity).

There's no section specifically allowing a deduction, it's a normal section 81 deduction (wholly & exclusively).

http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-04/04-06-01.pdf

The_Bot

barneystinson wrote: »

There's no section specifically allowing a deduction, it's a normal section 81 deduction (wholly & exclusively).

http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-04/04-06-01.pdf

Sorry, I wasn't clear earlier. I was wondering more on Lockedout2's post about claiming the premiums as a deduction in the context of an individual taxpayer, I didn't think that was possible.

Lockedout2

The_Bot wrote: »

As a matter of interest, which section of TCA 97 enables the deduction of life assurance previous against income? These days most life assurance policies are taxable under the gross roll up regime (i.e. Tax free roll up during live of the policy with exit tax applied by insurance company on maturity).

I think Revenue allow them on a concession basis.

http://www.revenue.ie/en/tax/it/leaflets/it70.html#section3

cat_xx

L1011 wrote: »

It would be rather unheard of, and rather suspicious, for the beneficiary of a life insurance policy to have paid the premiums.

I'm not sure if I worded it clearly.

A person died and the spouse received a payout from the life insurance company.

This has been included as cash introduced in their capital account and therefore included in their form 11 as they are a sole trader. Is this the correct treatment?

I would have thought it didn't need to be disclosed.

barneystinson

cat_xx wrote: »

I'm not sure if I worded it clearly.

A person died and the spouse received a payout from the life insurance company.

This has been included as cash introduced in their capital account and therefore included in their form 11 as they are a sole trader. Is this the correct treatment?

I would have thought it didn't need to be disclosed.

Well if it was lodged to a bank account that forms part of their sole trade accounts, it's introduction has to be explained (otherwise their balance sheet doesn't balance!).

So yes it probably is the correct treatment.