Tax Relief Life Assurance

pawsforthought_2

I notice Hargreaves Lansdown are advertising on their website a free brochure on life assurance with tax relief . Scheme available from April .

Can anyone shed any light on what scheme this is . At face value would seem attractive especially to Higher rate taxpayers but the "devil may be in the detail"

Thanks

pawsforthought

dunstonh

Pension term assurance. Its an old product, been round for many many years. However, in 2001, the contribution limits were changed and it made it virtually impossible to sell one. Only those that already had one could keep it. From April 2006, the pension contribution limits are changing and pension term assurance comes back into play.

There are some warnings attached to it and some providers will not be able to offer all the life cover addons that go with a level term assurance. However, for most people, there is no reason to consider any reason why PTA will not become the mainstream product to replace LTA. At least until Gordon Brown decides to close that loophole.

jasonking

Many companies are making out that it is a simple decison of whether its cheaper than traditional term assurance as well...but it isnt for some. There are still contribution and benefits limits you need to make sure you dont breach (albeit very generous limits) else you risk a 55% tax charge.

You wont be able to include Critical Illness cover or family income benefit, terminal illness may be slightly different and waiver of premium and joint plans probably wont be available either.

Apart from this most will probably benefit from Pension Term Assurance after April

dunstonh

There are still contribution and benefits limits you need to make sure you dont breach (albeit very generous limits) else you risk a 55% tax charge.

Dont think many are going to fall foul of the £215k p.a. contribution allowance

Any amount above that can still be paid but will not gain tax relief. There is no 55% tax charge.

You wont be able to include Critical Illness cover or family income benefit, terminal illness may be slightly different and waiver of premium and joint plans probably wont be available either.

Yes you can. Providers have already found ways round it. LVFS sent out an email a week or so back. Get in touch with the rep there JK for more details.

Still no news on whether pension term assurance will change from being a designated investment product to a protection product but it looks like it will be. As per the rest of A day changes, the final rules are being left to last minute!