{"id":26014,"date":"2016-07-11T08:43:26","date_gmt":"2016-07-11T07:43:26","guid":{"rendered":"https:\/\/www.wingatebs.com\/registered-group-life-scheme-v-excepted-group-life-policy\/"},"modified":"2016-07-11T08:43:26","modified_gmt":"2016-07-11T07:43:26","slug":"registered-group-life-scheme-v-excepted-group-life-policy","status":"publish","type":"post","link":"https:\/\/www.wingatebs.com\/registered-group-life-scheme-v-excepted-group-life-policy\/","title":{"rendered":"Registered Group Life Schemes v Excepted Group Life Policies"},"content":{"rendered":"

In recent years Excepted Group Life Policies have become\u00a0more popular and\u00a0as such the following may be useful in order\u00a0to provide a basic comparison between these and the traditional Registered Group Life schemes. It is not meant to be exhaustive and is based on our current understanding of legislation which can change without notice.\u00a0 It is not a recommendation for changing any existing arrangements\u00a0and professional advice should always be sought prior to making any changes to any such arrangements.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0<\/strong><\/td>\nRegistered Group Life Scheme<\/strong><\/td>\nExcepted Group Life Policy <\/strong><\/td>\n<\/tr>\n
Basic requirements <\/strong><\/td>\nEstablished using a trust deed and then registered with HM Revenue & Customs<\/p>\n

 <\/p>\n

Once registered, a Group Life Assurance policy is set up<\/td>\n

A Discretionary Trust deed is established the only asset of which will be the excepted group life policy<\/p>\n

The policy must meet certain conditions to qualify as an excepted policy which are:<\/p>\n

–\u00a0 A minimum of 2 lives must be covered
\n–\u00a0 It must provide for a capital sum payable on the death of a person included in the policy before age 75
\n–\u00a0 The same method is to be used for calculating the capital sum payable for all persons included in the policy
\n–\u00a0 It cannot accrue a surrender value
\n–\u00a0 No other benefits can be payable other than the capital sum
\n–\u00a0 The capital sum must be paid at the discretion of:
\na)\u00a0\u00a0 An individual or charity beneficially entitled to them, or
\nb)\u00a0\u00a0 A trustee or other person acting in a fiduciary capacity who will ensure the sums are paid to the beneficiary<\/p>\n

– <\/strong>Tax avoidance is not the main purpose or not one of the main purposes, for which a person is at any time:<\/p>\n

a)\u00a0\u00a0 A holder of the policy, or
\nb)\u00a0\u00a0 A person beneficially entitled under the policy<\/td>\n<\/tr>\n

Minimum number of lives at outset <\/strong><\/td>\n2<\/td>\n2<\/td>\n<\/tr>\n
Who can be covered? <\/strong><\/td>\n–\u00a0\u00a0 Employees of an employer<\/p>\n

–\u00a0\u00a0 Equity partners if the partnership also has employees that are covered<\/td>\n

Anyone can be included but<\/strong> often insurance companies require a link via employment or partnerships<\/td>\n<\/tr>\n
What benefits can be provided? <\/strong><\/td>\nA lump sum and\/or dependant\u2019s pension payable on death only<\/td>\nA lump sum only which must be the same for all members<\/strong>, payable on death only<\/td>\n<\/tr>\n
Lifetime allowance (LTA) charge <\/strong><\/td>\n–\u00a0\u00a0\u00a0 Lump sum and retirement pensions paid are assessed against the LTA<\/p>\n

–\u00a0\u00a0\u00a0 Benefits that exceed the LTA are subject to a tax charge<\/p>\n

–\u00a0\u00a0\u00a0 Death in service pensions do not count towards the LTA nor are assessed against the LTA<\/td>\n

The LTA does not apply<\/td>\n<\/tr>\n
Income tax <\/strong><\/td>\n–\u00a0\u00a0\u00a0 Lump sum benefits are not subject to income tax<\/p>\n

–\u00a0\u00a0\u00a0 Dependents pensions treated as earned income<\/td>\n

Lump sum benefits are not subject to income tax<\/td>\n<\/tr>\n
Inheritance tax <\/strong><\/td>\nBenefits are not subject to Inheritance Tax<\/td>\nSchemes are subject to the normal inheritance tax rules that apply to discretionary trusts further details of which can be provided on request<\/td>\n<\/tr>\n
Protection from the LTA <\/strong><\/td>\nProtection may<\/em> be lost in certain circumstances eg if a relevant benefit accrual is made in a registered pension scheme or if an individual joins a new registered pension scheme. Different rules apply for each form of protection further details of which can be provided on request<\/td>\nMembership of an excepted policy has no affect protection<\/td>\n<\/tr>\n
Tax avoidance <\/strong><\/td>\nNot applicable as schemes obtain tax privileges through registration<\/td>\nTax avoidance must not be the main purpose, or one of the main purposes, for the policyholder or one of the persons entitled to benefits under the policy<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

In recent years Excepted Group Life Policies have become\u00a0more popular and\u00a0as such the following may be useful in order\u00a0to provide a basic comparison between these and the traditional Registered Group Life schemes. It is not meant to be exhaustive and is based on our current understanding of legislation which can change without notice.\u00a0 It is […]<\/p>\n","protected":false},"author":19,"featured_media":26015,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[37,27],"tags":[46],"acf":[],"_links":{"self":[{"href":"https:\/\/www.wingatebs.com\/wp-json\/wp\/v2\/posts\/26014"}],"collection":[{"href":"https:\/\/www.wingatebs.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.wingatebs.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.wingatebs.com\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/www.wingatebs.com\/wp-json\/wp\/v2\/comments?post=26014"}],"version-history":[{"count":0,"href":"https:\/\/www.wingatebs.com\/wp-json\/wp\/v2\/posts\/26014\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.wingatebs.com\/wp-json\/wp\/v2\/media\/26015"}],"wp:attachment":[{"href":"https:\/\/www.wingatebs.com\/wp-json\/wp\/v2\/media?parent=26014"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.wingatebs.com\/wp-json\/wp\/v2\/categories?post=26014"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.wingatebs.com\/wp-json\/wp\/v2\/tags?post=26014"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}