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30 October 2000
A sole-trader hairdresser client has purchased new premises with a bank loan which was granted on the basis that he takes out insurance on his own life, so that the loan will be repaid in the event of his death, and also critical illness insurance so that the loan repayments can continue to be met if he falls ill.
I have advised him that the premiums on these policies are not a tax-deductible expense, but neither would any monies received from claims under the policies be taxable.
I have advised him that the premiums on these policies are not a tax-deductible expense, but neither would any monies received from claims under the policies be taxable.
A sole-trader hairdresser client has purchased new premises with a bank loan which was granted on the basis that he takes out insurance on his own life, so that the loan will be repaid in the event of his death, and also critical illness insurance so that the loan repayments can continue to be met if he falls ill.
I have advised him that the premiums on these policies are not a tax-deductible expense, but neither would any monies received from claims under the policies be taxable.
However, he contends that since the premiums are paid wholly and exclusively for his business, he should be able to claim them, and I wonder if I have missed anything. Is there any way that tax relief can be granted on such premiums?
(Query T15,712) Beehive.
I have advised him that the premiums on these policies are not a tax-deductible expense, but neither would any monies received from claims under the policies be taxable.
However, he contends that since the premiums are paid wholly and exclusively for his business, he should be able to claim them, and I wonder if I have missed anything. Is there any way that tax relief can be granted on such premiums?
(Query T15,712) Beehive.
