The taxation of insurance proceeds is relevant for sizing a policy limit. Laura Foley and Tom Cartwright (Certa Insurance) consider various practical scenarios and implications.
In the throes of a fast-paced transaction or a complicated reorganisation with a knotty tax issue that is being insured the potential tax treatment of any insurance proceeds can be an unwelcome additional complexity. But it is an element that is worth bearing in mind when considering who will be the insured and when setting the required insurance policy limit (to ensure it covers potential grossing up of the proceeds). This could in turn impact the premium as it is calculated as a percentage of the policy limit.
This article considers the key variables and how they could impact typical policy provisions. Legislative references are to TCGA 1992 unless otherwise stated.
Capital or income?
The first key question is whether proceeds from a tax...
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The taxation of insurance proceeds is relevant for sizing a policy limit. Laura Foley and Tom Cartwright (Certa Insurance) consider various practical scenarios and implications.
In the throes of a fast-paced transaction or a complicated reorganisation with a knotty tax issue that is being insured the potential tax treatment of any insurance proceeds can be an unwelcome additional complexity. But it is an element that is worth bearing in mind when considering who will be the insured and when setting the required insurance policy limit (to ensure it covers potential grossing up of the proceeds). This could in turn impact the premium as it is calculated as a percentage of the policy limit.
This article considers the key variables and how they could impact typical policy provisions. Legislative references are to TCGA 1992 unless otherwise stated.
Capital or income?
The first key question is whether proceeds from a tax...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
