Relevant life cover trust
Our Relevant Life Cover Trust is specially designed for use with Relevant Life policies. Relevant Life Cover Trusts should be established at policy outset and must be signed and dated on or before the start date of the policy for it to be valid. This is a discretionary trust although your client may wish to name specific beneficiaries by completing a Letter of Wish form.
- Tax efficient.
- Speed of payment.
Other information you need
You should consider a Relevant Life Cover Trust policy trust if your client is an employer and they wish to:
- Provide one or more employees with tax-efficient benefits in the event of death or terminal illness whilst in service, without having to set up a group arrangement.
- Secure the possibility of tax relief on the premium payments.
- Ensure that the policy proceeds are available to the employee and/or his or her family without the delays that might otherwise arise if probate were required before payment could be made.
- The death benefit (including terminal illness benefit) will not form part of the employee’s lifetime allowance for pension purposes.
- Premiums paid by the employer will not be treated as a benefit in kind for the life assured/employee.
- The premiums paid will also not form part of (and so will not reduce) the employee’s annual allowance for pension purposes.
- Premiums will not be assessable on the employer or employee for National Insurance contribution purposes.
- The benefits under the policy will be paid free of income tax.
- The death benefit will generally be paid free of inheritance tax and won’t form part of the employee’s estate for inheritance tax purposes.
- Premiums paid by the employer will be treated as a business expense for tax purposes if they satisfy the ‘wholly and exclusively’ test.
If you have decided that a Relevant Life Cover Trust (PDF) is suitable for your client please send us the completed and signed trust documentation as soon as possible. We cannot treat a benefit as being under trust until we have received the relevant documentation.
For relevant life the forms must be signed and dated on or before the start date of the policy for it to be valid. If it is not correctly completed we may not be able to accept the application.
Our trust forms are editable PDFs. This means that you can complete them online and email to your client for them to print and sign.
Completed, signed and dated, trust forms can be sent to us either by email (a scanned copy or even send a photo) or by post.
Please remember to include the relevant plan number and ensure that the form has been signed and dated.
Scottish Widows Protect Servicing Team,
15 Dalkeith Road
Trusts are documents with legal significance that may affect the rights, obligations and tax position of your client and the beneficiaries. You should not proceed unless you are satisfied that you understand its effect and that it achieves your objectives. If you have any doubts or uncertainties you should seek the appropriate legal guidance. Special consideration may be required where persons are either resident or domiciled outside the UK.