Income Protection Insurance Tax Deduction

Part 15 01 10 relief for contributions to permanent health benefit schemes.

Income protection insurance tax deduction. If you prepay your income protection before 30 june you can claim your tax deduction in the current financial year e g. The deduction is allowed in terms of section 11 a of the income tax act no 58 of 1962 the act read with section 23 m iii of the act. Tax relief on income protection. Section 471 taxes consolidation act 1997.

Business income protection if you wish to put your income protection premiums through your limited company as a trading expense it is usually wise to take out executive income protection rather than a personal plan. If you are self employed it may be payable gross. Tax position on income protection an income protection insurance permanent health insurance scheme can be established so that the employer will receive a proportion of the salary of an employee if the employee is unable to work because of ill health. Income protection premiums up to certain limits qualify for tax relief at your marginal rate.

Tax treatment of benefits received under permanent health benefit schemes section 125 taxes consolidation act 1997 this manual is currently unavailable as it is being updated. I agree with mr mischief if you claimed the money in theory will pay someone to run the business so if relief is claimed on the premiums the income is taxable but offset by the salary deduction so should be tax neutral and if the insurance makes additional profit it would be right for this to be taxed. Premiums on such policies are not regarded as incidental to obtaining the finance within the meaning ofs58 income tax trading and other income act 2005. Income protection insurance deductibility 31 january 2018 many people have income protection insurance policies and ask us about income protection insurance deductibility well the great news is that these policies are claimable in your personal income tax return whether you are in business or in paid employment as long as any proceeds upon making a claim are treated as taxable income.

If you are employed the life assurance company will deduct tax and social insurance payments from your benefits in the same way that your employer would. The employer then pays the amounts involved to the employee. Income protection taken out personally tends to be paid from your net income and as a result any benefit payable should a claim arise is paid tax free. Capital protection and income protection.