Reform of employer contributions into life assurance and overseas pension schemes
16 July 2018
The draft Finance Bill 2018-19 includes the measure which concerns premiums paid by employers into life assurance products and contributions to qualifying recognised overseas pension schemes (QROPS).
These contributions are currently only tax-exempted if the beneficiary is the employee, or a member of the employee’s family or household. This measure will allow the beneficiary to be any individual or registered charity without the premiums being treated as a taxable benefit in kind.
This measure modernises the exemption to ensure the tax charge remains relevant and fair. Extending the exemption to include any named individual as beneficiary allows the employee to nominate their preferred recipient irrespective of their relationship to the employee in law. This ensures that employees throughout the workforce are treated fairly and proportionately with employees in marriages or with close family.
If you have any comments on or questions about this change, please contact the HMRC Employment Income Team at: [email protected].