Industry news and analysis

Questions about Relevant Life

Effecting a policy

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How can a relevant life policy be set up? What is required in addition to an application to set up an RLP?
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Need a Trust

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Why is a trust necessary? What special provisions must be included in an RLP trust? Can the employee also be a beneficiary under the RLP trust? How are the employees rights under the trust dealt with under the SW RLP trust? Does the employee have any say in who should benefit on their death? Who should the trustees of the RLP Trust be? Should additional trustees be appointed in all cases?
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Legislation

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What legislation covers RLP products?
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Eligibility

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Who can be a life assured under the plan? Are there any limits on cover under an RLP? Is the pensions lifetime allowance affected by RLP?
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Uses of RLPs

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My client wants to assign their policy to a lender. Can they do this? It is OK to use an RLP policy for business protection between shareholders? What happens to an RLP policy if the employee leaves service other than because of death? Can a former employee continue to pay premiums under the RLP after leaving employment? If the employee changes jobs, can the new employer take-over premium payments under the RLP? Are there any tax problems if employees continues to pay RLP premiums after leaving employment? Can the policy be assigned from the trust to the leaving employee or another beneficiary?
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Tax considerations

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Will the premiums paid under an RLP always be deductible for the employer? Is there any likelihood that the policy benefit could be taxed on the employee? What are the tax issues if the policy is assigned to the employee (or family member) on leaving employment? Are there any IHT implications in relation to an RLP trust? What are the consequences of the RLP trust being a relevant property trust?
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Tax avoidance

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Is there any guidance from HMRC about the tax avoidance motive? Can replacing existing cover with an RLP be considered tax avoidance?
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Every care has been taken to ensure that this information is correct and in accordance with our understanding of the law and HM Revenue & Customs practice, which may change. However, independent confirmation should be obtained before acting or refraining from acting in reliance upon the information given.

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Scottish Widows Limited. Registered in England and Wales No. 3196171. Registered office in the United Kingdom at 25 Gresham Street, London EC2V 7HN. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 181655.

Scottish Widows Unit Trust Managers Limited. Registered in England and Wales No. 1629925. Registered Office in the United Kingdom at Charlton Place, Andover, Hampshire SP10 1RE. Tel: 0345 300 2244. Authorised and regulated by the Financial Conduct Authority. Financial Services Register number 122129.

HBOS Investment Fund Managers Limited, registered in England number 941082. Registered office in the United Kingdom at Trinity Road, Halifax, West Yorkshire HX1 2RG. Authorised and regulated by the Financial Conduct Authority. Financial Services Register number 119223.

Scottish Widows Bank is a trading name of Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales, no. 2065. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under number 119278.

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