QFA Life Assurance Practice Questions - QFA Life Assurance (LIA IOB, Ireland) Exam

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A company takes out a keyman life assurance policy on its managing director. The premiums are paid by the company, and the company is the sole beneficiary. What is the tax treatment of the premiums and the policy proceeds on death in Ireland?

Premiums are tax-deductible for the company, and proceeds are subject to corporation tax Premiums are not tax-deductible, and proceeds are paid tax-free to the company Premiums are tax-deductible only if proceeds are used to pay a dividend, and proceeds are subject to income tax Premiums are not tax-deductible, but proceeds are subject to Capital Acquisitions Tax (CAT)

Correct Answer:

Premiums are not tax-deductible, and proceeds are paid tax-free to the company

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