CII R05 Financial Protection

Under HMRC guidance, key person insurance premiums are generally allowable as a business expense only when:

The key person owns less than 5% of the company's shares The policy term does not exceed five years The sole purpose of the policy is revenue protection rather than a capital purpose The sum assured does not exceed ten times the key person's annual salary

Correct Answer:

The sole purpose of the policy is revenue protection rather than a capital purpose

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