This appeals to business owners and shareholders as it provides a financial safety net for business continuity if a ‘keyperson’ in the business were to die.
This would provide a lump sum to the business which could be used to hire a replacement and protect profits if the insured individual died and they could no longer perform their operational duties.
This could be the difference between a small business staying afloat or going under and can protect the livelihoods of the surviving employees as well as protect the interest of investors.
Here is an extract from the government website with regards to business insolvencies:
'The number of registered company insolvencies in England and Wales was 2,238 in May 2025, 8% higher than in April 2025 (2,074) and 15% higher than the same month in the previous year (1,946 in May 2024). Monthly company insolvency numbers in the first five months of 2025 were slightly higher than in 2024 and at a similar level to 2023, which saw a 30-year high annual number of insolvencies.'
Considering 2023 was after the world's largest pandemic since the Spanish Flu in 1918, the figures aren't fantastic. Of course, this is down to a number of factors, including wage rises, tax hikes, business financing costs as well as a rise in the cost of living.
I urge all small businesses to consider the implication of a keyperson not being able to carry out their duties.
Small Self Administered Schemes (SSASs) appeal to business owners who want to have another source of financing for their business.
These types of sophisticated pensions appeal to business owners who would like to use their pension to fund their business's activities.
They are similar to a SIPP but can make loans to the sponsoring employer of up to 50% of the value of the SSAS. They can hold commercial property, stocks and shares and cash.
They allow the business owner to avoid paying interest to the high street lenders in times where their business may need a cash injection.
These arrangements allow individuals to transfer assets into a trust, effectively removing them from their estate for IHT purposes. Assets placed into a Gift Trust generally become exempt from inheritance tax after seven years, as long as the settlor survives for that period.
They can afford to give away the capital.
However, as they do not want the beneficiary of the funds to have access right away, they gift the money to a trust with trustees.
The intended beneficiary has the right to the capital and will have access to the funds in due course with the permission of the trustees.
Clients want to make sure that their money can be used to benefit them and their families. They want to make sure that they see as much of their income as possible.
Tax planning allows clients to maximise the allowances available to them through using tax efficient savings vehicles, transferring assets between spouses and strategically pulling money out of different assets to reduce the amount of tax paid whilst still meeting expenditure needs.
Clients worry that they are paying too much tax.
Clients aren't aware of why they are paying the amount of tax they are or whether they are paying the right amount.
This appeals to business owners as it can be used to benefit their family if they were to die. This can be used to pay off debt and supplement the loss of income that would occur if the insured individual were to die.
There is usually a very high limit on the amount of cover that can be applied for, providing a higher level of cover where needed.
Relevant Life is a tax-deductible expense and isn't a P11d making it extremely tax efficient for businesses and the insured.
This appeals to business owners who have family members that have no interest in running the business. It protects the family of the deceased as well as the remaining shareholders of the business.
It pays out a lump sum to the business which allows the business to buy back shares from the family of a deceased shareholder which they would inherit from the estate of the deceased.
This provides the family with the cash equivalent to the value of shares at a predetermined rate, which is a contractual right taken through a cross-option agreement.
This ensures the family receive fair value for the shares and the business does not have individuals running it who do not have the expertise to do so.
The shares are then cancelled following the business buyback with the remaining shareholder's ownership in the business increasing proportionately.
The negative effects of inflation can erode the purchasing power of money.
Investments and investing can safeguard against the negative effects of inflation by growing the value of a family, individual or businesses' wealth over the medium to long term.
Clients wants to enjoy the benefits of investing with the help of an expert so that they can take advantage of the benefits markets offer in a measured way.
Clients may have inherited some money, saved up some surplus income, have a pension fund or have a goal that they want to reach and believe that investing may help them to achieve that goal.
These investments are for those who have an inheritance tax issue (IHT). They want to immediately reduce the value of their estate for inheritance tax purposes.
The donor wants to gift funds but also wants a regular income from the funds to meet their expenditure needs.
A Discounted Gift Trust (DGT) is an IHT planning arrangement that allows individuals to make a gift to beneficiaries while retaining the right to receive regular payments from the gifted assets.
The donor's age and health is taken into account to determine the amount discounted from the estate.
This structure effectively reduces the value of the gift for IHT purposes, potentially providing an immediate IHT benefit.
"Menento Mori" - Remember you will die
