WealthTalk - money, wealth and personal finance.

6 Tax-Saving Tips For Business Owners

Episode Summary

Business owners: did you know you can have your business pay for your life insurance policy but in a super tax-efficient way on six different levels? And it costs the same as standard cover? Well, tune in today because that’s exactly what we’ll be sharing with you! if you're in business, you're in a unique position because there are greater opportunities available to you to build your wealth, helping both yourself and your family - but many business owners are not aware of these breaks. Featured Guest: Paul Brooks, SSAS Director, WealthBuilders

Episode Notes

Resources Mentioned In This Episode:

Want to speak to WealthBuilders to find out more about Relevant Life Insurance? Click Here


>> WT008: Protecting Your Assets [The Roof]

>> WT023: Using Trusts To Protect Your Assets


>> Register for Free Access to the WealthBuilders Membership Site



>> Would you like to work with Kevin and Christian on your very own wealth plan? Find out more about our 7 Steps to Wealth Programme


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Episode Transcription

Unknown Speaker  0:01   The purpose of wealth talk is to educate, inform and hopefully entertain you on the subject of building your wealth. Wealth builders recommends you should always take independent financial tax or legal advice before making any decisions around your finances.

Christian Rodwell  0:19  
Welcome to Episode 66 of wealth talk. My name is Christian Rodwell, the membership director for wealth builders and I'm joined today by our founder, Mr. Kevin Whelan. Hi, Kevin.

Unknown Speaker  0:27  
Morning, Chris, we found a very fast route to 66, don't you think? Yes, indeed,

Christian Rodwell  0:32  
indeed. It's whizzing by but lots of fun every week we enjoy this and hopefully everyone listening enjoys it too. And of course, we thank you for all the reviews and the kind words that we very often receive. And today, Kevin, we've invited that one of our close friends. Good, good team member, and Paul Brooks, and we'll be hearing from Paul very shortly about a special type of have insurance which is for business owners and certainly a wealth building an unknown wealth building secret, shall we say for many people?

Unknown Speaker  1:08  
Look, there's lots of hidden secrets in the world of wealth, and then normally to be discovered, and if you remember, way, way back Chris crumbs might even be episode one or two. I talked about almost having the curiosity of a child with the ROI which that you're one relationship, opportunity or idea ROI from a complete transformation your wealth. So one of the things I love about the podcast that we do, Chris is we're discovering and sharing nuggets for people decide whether they want to pick up and polish or whether they want to put them back down again and just ignore them and that's fine. And that's certainly one of these is a it's a nugget that needs to be polished but you kind of need to understand it. Because I think the way you were introduced to Chris sounds a bit boring. Right? insurance? I mean, who wants insurance?

Christian Rodwell  2:06  
Yeah, I know. And I guess life cover, it splits opinion, Kevin and be good, you know, to understand really who needs it, you know, does is it something everyone should be thinking about? Or are there different times in your life maybe when it's more important than others? That's a

Unknown Speaker  2:21  
really great question. If you think about it, insurance is a way of putting things to the way you would want them to be right, the house burns down, you know, the insurance, puts it back to where it was before. You know, if your car gets wrecked, you get a new car, you get the car essentially repaired. And this is true, much more. So when you're talking about people, not so much that you can replace people, of course, you cannot do that. But if you think about from a wealth perspective, Chris, what people do is they're their own Almost like an asset in themselves in their capacity to generate income. Now for most people that's trading time for money. So therefore, it's quite critical, whether you've got a job or whether you're in business. So it doesn't matter whether it's this special kind of live cover or not, that you've asked me the question specifically about life cover. And I think life cover is a wealth replacer it kind of says this.

Unknown Speaker  3:27  
I would like to be wealthy.

Unknown Speaker  3:30  
I would like my family to be wealthy. I would like to leave a great legacy. These are the things that I want to do, whether I'm alive or whether I'm dead. And of course, we know unfortunate things happen. We know that happened with my dad, which was the very essence of how I got started on my own wealth building journey as powerfully as it incentivize me to do so. So you know, that's an important thing. And my dad didn't have any light colour. So he didn't imagine the consequences to the people left behind, because he got seduced by the thought that I'm earning loads of money that will continue forever. And of course, with life doesn't continue forever. That's we always know that, quote, don't read death and taxes. So in my view, then and certainly the wealth builder view of life cover is you generally speaking needed for two purposes. One for the elimination of debt, particularly if you don't want your family to in a home, for example, a mortgage. You don't want them to be in a position where their home could be at risk. Now putting that to one side, the second reason is that you are on a journey, hopefully, to be building your wealth and you're going to put assets in place To generate that wealth, and we know that our typical client Chris wants to target and it's not mean everybody's targets the same, but the average we get for independence about 10,000 a month, right? So if we say, All right, let's let's make it very simple. Say somebody says I would I would want to build if I'm alive and well, to enjoy and share 100 grand a year. And the question then is, well, do you want that same hundred grand a year to be provided, if you don't make it? If your plans get interrupted by something that devastates you. That's what insurance does. So if you think about it, then it's a wealth gap plan. It's the it's the insurance that provides the asset. If you don't live to provide the assets yourself stated differently. If you have a sum of money, and you know what the predictable ROI is return on investment then you know how Which lock Have you need. So if you need 100,000 a year, and you can get 10% on your money, or you believe your family can, then you need 1 million pounds worth of life cover to do that, right? If the gap was zero to 10, you had no recurring income at all, no wealth at all. Then if you believed it was 10% 10% times 1 billion would give 100,000 a year and that would give them 100,000 a year forever. However, most people don't know how to get 10% on their money, particularly the beginning of their wealth building life. So therefore, you might say, well, predictably, if they put the money in the stock market and low cost trackers and those sorts of things, they might get four or 5% Okay, then that would be 2 million. You see the point. So the whole essence of life cover is to work out the gap between What your current wealth income is what your recurring income is from assets, what you wanted to be. Now it could be security could involve instead of independence. But either way you choose the figure that you're looking to aim for. You calculate the predictable ROI. And in doubt, choose 5% for now, just for a number, and that tells you how much cover that you need. And when you get to a place where you live then, and you build your wealth, and we know it can take, typically, you know, three to seven years, so let's say takes you five years. Then if you've got all the wealth you need, you've produced all the assets. You've got all the income you need in five years. So you can provide a predictable income flow to you when you're alive and your family if you're dead. Do you need the cover anymore? Answer you do not. So the whole idea of life cover is a temporary gap. Not a lot term thing you buy, like investing in the stock market, you buy it and you forget about it. You may want to keep it, certainly, but you do not need it. So that's the point. So if you can get a million or 2 million quids with a cover that lasts for five years or seven years or however long it's gonna take you, that's probably all you need to do. And your family will be certain of their wealth, whether you're alive or dead. So

Christian Rodwell  8:26  
it does, yeah. And probably highlights for a lot of people that they they're probably paying unnecessarily or overpaying on their insurance and not necessarily thinking about how it fits into their overall wealth plan. So I think that is very interesting. Yeah, I

Unknown Speaker  8:40  
think people are Oh, well, I think two things, Chris. People are overpaying for sure. As you'll hear from Paul, I mean, there are huge tax savings on on and on average, if you listen to what Paul has to say and get through any podcast which talks about insurance, you realise you've probably be able to half the costs Have the cover. Now think about that. If I offer so let's say you you choose Chris a level of cover that you want. If I said to you, I can offer to you this price or 50% off. You take the 50% off every time when you if it's the same cover, no difference in the cover actually better cover. As you'll discover when you listen to Paul, then it's just amazing that so few people discover this and partly because they buy live cover either online, so they think it's cheap. But it's never 50% cheaper. or two, they don't trust anybody. You know, they think this is the best way to do to kind of a DIY solution instead of talking to somebody who knows what they're doing. And of course, three you need to discover it. So I hope that this message gets through to some of our audience, and they pay attention and make a note in their 30 day cycle. Goal of doing something good in their wealth is to take a 30 day period, whether it's July or August, and look into for habits help you look into the concept of relevant life. Well, we set it up well, for Paul Hadley,

Christian Rodwell  10:14  
I think we have and of course, Paul was only with us. A few episodes go Episode 63. And Paul is the SAS director for wealth builders, and he was talking then about how you can take control of your pension. And of course, the best way of doing that is for a SAS and again, that's for business owners. Once again, Paul returns today to talk to business owners. So he really is a business owners best friend, isn't he?

Unknown Speaker  10:36  
Yeah, yes. And, you know, all in truth, you know, whether you're a business owner now or not. If you want to be wealthy, you're going to need to be maybe Chris, I'll touch on some of the other benefits that business owners uniquely have in roundup with Paul so that we get the chance to listen to a policy say on this specific subject, but yes, it's uniquely available to Directors of limited companies are not to sort of, you know, employed people in normal nine to five jobs.

Christian Rodwell  11:06  
Okay. Let's head over now to our conversation with Paul Brooks.

Unknown Speaker  11:10  
Oh, welcome back to wealth talk. Hi, Chris.

Christian Rodwell  11:14  
Glad to be here. I know it took 63 episodes to get you on. And now we're back within just a couple of episodes later, so

Unknown Speaker  11:21  
I can't get enough.

Christian Rodwell  11:23  
Well, today we're focusing on something different and we're focusing on a type of life insurance, which has definitely got some benefits for business owners and wealth builders. So why don't we dive into what exactly is Redbull life insurance?

Unknown Speaker  11:39  
Sure. Well, it's, I mean, it's really a fantastic tool for business owners uniquely for business owners. And though the name sounds a bit obscure, relevant life, the way I would describe what it does is really a directors or a key employees. Death in service life insurance benefit but it's specifically tailored for small businesses and and ultimately what you're doing is creating individual life insurance policies but in a super tax efficient way which which on on six different levels and we'll cover that I'm sure in a moment saves tax. So effectively you're getting tax man to pay some of your life insurance premiums which which is pretty cool, I think.

Christian Rodwell  12:28  
Yeah. Well, I guess let's, let's look at those six different ways then and and see just how beneficial this can be.

Unknown Speaker  12:37  
Sure, absolutely. So, relevant life or directors, life insurance, whatever you want to call it is, is very, very similar. In fact, it's pretty much identical to a normal personal life insurance. It isn't a super complex, super fancy type of cover. It's really just the treatment of the cost of the premiums that make it up. And the way that it's set up is slightly different. So, in simple terms, really a relevant life policy is a policy that your business your limited company would take out. And the limited company would be the owner of the policy. Okay. So the policy is created by the business and it's set up against a person, which will be called the life insured, and they are the person on whose basis a payout would be made if they pass away. So the business owns the policy and because it owns the policy, it pays the premiums. And the person who's covered is the life insured, they are the person whose family would be benefiting from the proceeds of the insurance if they were to die. Okay. And that would typically be you, the director of the business or another key employee, perhaps part of your executive team. If you have Have a slightly bigger business and and you're looking to provide benefits to your employees and the biggest benefit and the first of the six tax savings where relevant life is concerned is that because the policy is owned by the business, it's a genuine tax deductible corporation tax expense. So your first saving your first tax saving in the six tax savings that I mentioned a minute ago is that corporation tax so today as we're speaking right now, you know 19% saving on your corporation tax because the cost of those premiums are tax deductible. She's pretty amazing. And so even on a like for like basis and and you know, you've got that immediate cost saving compared to having a personal life insurance policy.

Unknown Speaker  14:56  
Pretty cool.

Unknown Speaker  14:58  
Yeah, pretty cool. That's just one So the next one is is, is really a tax saving that's relevant to the director or the employee who's had the life insurance policy taken out on their behalf. Remember, the company is the owner of the policy, the owner of the premiums, but when you have benefits paid for by your company, or by another business that you work for, very often they will attract something called a benefit in kind tax, which is basically HMRC is way of collecting tax on something that isn't paid to you as money but is paid to you in some other form. And very commonly, that would be you know, a company car, but it's also life insurance. And sometimes you would have a life insurance policy created by your employer or sometimes if you're a business owner, and you want to try and run your own insurance premiums, your own personal insurance premiums through your business. If you did that. would attract to benefit and contacts. And that means you basically be paying income tax and national insurance on the value of the premiums. Well, relevant life is exempt from Benefit income tax. So you the person who's getting the benefit of the life insurance policy paid for by the business don't then have to pay that benefit in contacts. So they're super tax saving number two is if any tax was kind. Well, exactly. Yeah. That's brilliant. I like that. Yeah, absolutely. So you know, the the benefit to the person with the premiums is they're not suffering that benefit in contacts. But that then takes me on to tax number three, or tax saving number three, I should say, which is employers National Insurance. So in the same way as the, as the person who's getting the benefit from the business would typically be taxed. The insurer sorry, beg your pardon the employee Who is providing that benefit must also pay National Insurance from the employment perspective. So, in the same way as a salary that is paid from a business, depending on how much is paid attracts employers National Insurance is roughly about 14%. That would also occur if you had benefit in kind payments, but again, because relevant life sits in that really unique specific part of the tax rolls. It's exempt from employers National Insurance, too. So there's another huge tax saving there

Christian Rodwell  17:33  
so far,

Unknown Speaker  17:34  
yeah, so those are all those three I guess, immediate tax savings in your life today. The next three are more about tax savings, either for your loved ones in the future, or for you later on in life. Okay. Number four, is in health inheritance tax. So, you know, on some level Or another most people are wanting to pass on the legacy down to their family. Of course they want to do it in a tax efficient way nobody wants to pay more tax than they need to. And it's very easy to to not quite get everything wrapped up in a neat tax efficient bundle and ultimately trigger some kind of inheritance tax liability somewhere down the line. Well, with relevant life cover your policy is written into a trust from the day it's created. And is it worth just having a very quick segue on trust just to kind of in you know, if

Christian Rodwell  18:39  
we, you know, we can definitely point back as well to some previous episodes, but for those, you know, perhaps are still not quite sure exactly how trust works or be useful.

Unknown Speaker  18:47  
Okay, so, quick 32nd overview then a trust is basically a legal document which ring fence is on protects assets or cash and it's used for a number of reasons trusts have been around for hundreds and hundreds of years in in England and in the UK. But predominantly they use to protect assets and protect cash for future generations. And one of the single biggest benefits of a trust is that it ring fences it pushes outside of your estate, the asset or the cash that you've placed into it, which means that it is it is an assessable for inheritance tax. Now, life insurance, with barely any exceptions that I can think of should should be written into trust because it immediately then protects that benefit for for your loved ones forever more. Relevant life is automatically written into trust when the policy is created, meaning there's no danger of that money accidentally creeping outside of of the trust and going into an estate and therefore potentially becoming taxable somewhere down the line. It's wrapped up in that neat tax for bundle from day one. Okay, so you're automatically protecting not necessarily a spouse or a partner, but possibly children further on down the line from from a big inheritance tax bill. Right. tax saving number five is is still broadly the same point, but it's thinking about the way that you can then use that trust with the money that's been paid out from the life insurance. Unfortunately, we've had to kill you off for this example, Chris, right. But will if that's okay, well, imagine we've created a policy for you. something tragic has happened and the life insurance has paid out. The Trust has collected that benefit. It's done the job it was designed to do, which immediately keeps it out of the estate. Now if that trust is then managed properly, for the people who've ultimately inherited it, your next of kin They can access the money from that and use it for whatever they want, you know, paying off debt, buying assets that produce income, which of course very much sits with, you know, huge theme of wealth builders, of course, and frankly, they can use it for anything they want. But if a trust is used properly, it has a, I guess what you'd call a rollover effect for future generations because you can actually use that money in that trust to reduce inheritance tax even further down the line for other people. So let me explain what I mean by that. If you can imagine the money's in the trust, and your partner takes wants to take some money to pay off the mortgage. Well, that would be logical. That's one of the main purposes that people want family protection, life insurance. Let's imagine that instead of just taking the money and it being discharged to your partner. Instead, what she does is she borrows the money from that trust. And there's a proper agreement drawn up between the trust and between her that says, you know, the money will be loaned, it will be loaned for her entire life, it will not attract the requirement for repayment until the day she dies. But an interest will be charged each year for the duration of the time that she has that

Christian Rodwell  22:22  
money. And who decides on that? Is that the trustee?

Unknown Speaker  22:26  
Yeah, it would be the trustees. And typically that would be your partner and possibly some other people and you as the person creating the policy will get to choose who you'd want your trustees to be from from day one. So, again, a separate topic, but it's important to choose trustees that you know, will have you know, your loved ones best interests at heart, and of course, they themselves can be a trustee. And so, let's imagine going back to that example, then that they your partner's got the money and she agrees this repayment free bye Interest accruing loan. And let's just imagine, for the sake of an argument, it's 5%. It doesn't matter, but let's just imagine it is. So the loan is made, your partner uses that money, she pays off the mortgage, she does some other things, the money gets spent and distributed. And then hopefully many years down the line, something happens and she passes away. Now, what actually then happens is that money is a debt that is owed back to the trust. And if you remember that 5% interest has been accruing and accruing and accruing year on year on year on year. So not only does her restate, which remember, in many cases is tax assessable for inheritance tax. Her estate not only owes the original money that she borrowed, but it also owns the 5% of compound interest year on year on year on year. So if you think about what that's doing, it's actually reducing the value of her taxable estate, because it's taking a chunk of value. For a state that is rightly legally owed back to the trust, the trust itself doesn't have to worry about, you know, taking the interest during her life because it's got that agreement in place, but it wants it on the day she dies. So a big chunk of money goes back to the trust, what that's actually done is dramatically reduced the value of your partner's estate. And therefore, the chance of her paying inherit also her family, her loved ones paying inheritance tax on that money is, you know, either reduced or perhaps even eliminated altogether.

Christian Rodwell  24:38  
I get it. It's super powerful it is. And I'm sure people are thinking now about different scenarios, and we'll have a lot of questions around about that. Yeah, but I'll let you I'll let you finish.

Unknown Speaker  24:49  
Yeah, okay. All right. So So those four and five are all about inheritance tax. Okay. So tax saving number six now. And this one is particularly valuable and important for people who have bigger pensions in their life. Because a lot of death in service policies that are created through traditional employment are done in such a way that means that they are assessed on the day of your death along with the value of your pensions, and there's something called the lifetime allowance, which is really, I guess, a glass ceiling but nonetheless, a limit on the amount of money that people can have in their pensions. And and before they start to have to have some tax paid on some of it. Lifetime allowance is super complex, very happy if you know, we could have a whole podcast on lifetime allowance easily. So without, you know, losing track, I guess. It's really at the moment. It's about million pound million and 70 ish something like that and over and above that amount there is sometimes a tax to pay on the difference well if you've got a big death in service policy with your employer then that value of the death cover that pays out on your passing away is added to the value of your pensions and if that pushes them over this threshold of a million and some pounds you're then getting taxed on that so even though you've done a great thing by having life insurance set up to protect your loved ones the tax man takes a big chunk of it you know and we know how hefty the tax on on death on inheritances you know 40% so an enormous chunk of that money that you've set up and thought will be there and available for your family could be swallowed up

Christian Rodwell  26:53  
every opportunity Hey.

Unknown Speaker  26:55  
Yeah, yeah, and you know, there's people sometimes called the lifetime allowances stealth death tax and actually in truth it is. But back to relevant life, relevant life because of its uniqueness because of the way it's set up does not fall into the lifetime allowance. So if you have the pensions or you're coming close to the lifetime allowance and definitely if you're in excess of the lifetime allowance, and you've got a death in service policy through your employer, relevant life could be a way of mitigating that potential lifetime allowance tax in the future.

Christian Rodwell  27:34  
Wow. Okay. The compounding effect there is pretty impressive. And why is this not so well known Paul, necessarily?

Unknown Speaker  27:45  
Well, it's a great question and I suppose, like all good wealth building tools, it needs people to shout from the rooftops about it because it isn't mainstream. And I guess the reason it isn't mainstream is because it isn't available to everybody. So only available to To genuine business owners and their does have to be a proper employee employer relationship. So unfortunately, sole traders can't have relevant life partners in a partnership can't have relevant life. It's really mainly for limited company directors and then LPs, where there's a formal company set up and then there are employees even if those employees are the directors, that doesn't matter. You know, most mostly it is directors taking relevant life cover. Okay,

Christian Rodwell  28:32  
and what about the cost? How does that compare to regular life cover?

Unknown Speaker  28:37  
Well, that's a great question. And you might be surprised to hear that it's exactly the same. So if you lined up 100,000 pounds worth of bog standard personal life insurance with 100,000 pounds worth and relevant life, the gross cost before any tax reliefs is exactly the same.

Christian Rodwell  28:56  
So my next question, Where do we get this from Paul?

Unknown Speaker  28:59  
Well, Unfortunately, it's not something you can take off the shelf. And in a way, actually that isn't necessarily such a bad thing you know. So with standard life insurance, you can go to a financial advisor, or you can go directly to an insurance company and we all know the big names, you know, the household names that probably provide the household cover car insurance, they also will provide life insurance. Relevant life is a bit more niche. What were the reasons we've just talked about making it a bit more nation because of age, not something you can get directly. You do need to see that professional advice and guidance from from a qualified financial adviser to make sure that you're setting it up. Because there are a couple of rules. You know, there are some limits to how much you can take which kind of links back to salary or drawings. But it does need to be set up and created by a financial advisor. It isn't something you can go directly for that's the only downside of relevant life. I guess that isn't really a downside. It's just a stipulation.

Christian Rodwell  30:03  
And if of course anyone wants to find out more than then wealth builders can help and they can get in touch with us.

Unknown Speaker  30:10  
Yeah, absolutely. Absolutely.

Christian Rodwell  30:12  
Great. Well, look at that has been so helpful. Paul, I'm pretty sure many of our business owner listeners will be, you know, really strongly considering this as an option now and why we should be? Well, absolutely,

Unknown Speaker  30:24  
they definitely should be, you know, and even if they're not pushing their own personal insurance premiums through their business, which can be done really isn't a very tax efficient way to do it at all, even if they're just paying life insurance premiums themselves personally, you know, three or four of those six tax benefits still apply. You know, so you're still making the corporation tax staving, you're still making the inheritance tax saving not just for your immediate family, but for multiple generations down the line. And of course, the lifetime allowance point is still relevant to

Christian Rodwell  30:58  
us. Brilliant. We'll pull up Drop the bombs on the last episode with the pension control. You've done the same again today, so we better start planning your return pretty quickly.

Unknown Speaker  31:09  
Honestly, I love these sessions, Chris. So I'd be delighted to come back. Really happy to do that. Thanks for having me. Thanks, Paul. Cheers, Chris. Bye.

Christian Rodwell  31:18  
Okay, six tax saving benefits there Kevin making the subject of insurance almost mildly interesting.

Unknown Speaker  31:26  
Yes. I think it's not the subject of insurance. That's interesting. To be honest, it's the subject of business. Because if you're in business, you're in a unique position, that the tax environment in the UK is skewed towards helping business owners more so. And that's probably true in most Western society. Actually, I think business owners have got the power to do things that helps themselves, their business and their families. In a way that employee ship just doesn't allow You know, Paul talked previously about SAS that's only available for directors relevant life? Well, you know, we think about it. It's a most of these things, you know, they're just awkward terms, they wouldn't win any prizes for marketing with a relevant life. Why relevant life? Doesn't seem to make any sense at all, should be directed live cover or something the same as SAS, small self administered scheme. I mean, come on, who invented that term? Terrible marketing terms. Anyway, when you see through the terminology, and that's, I guess, part of the problem, you get to see some real benefits. So why is this relevant to you? Haha, no pun. It's because if you can see and be committed to being a wealth builder, building wealth for you and your family, then you should have a business because having a business will open these opportunities to you. Not just the SAS. Not just Relevant life, but things like unique tax benefits like entrepreneurs relief. So instead of paying a fortune when you sell your business, you only pay 10% tax different ways that you can create benefits that you can enjoy in your life today that employees would have to pay tax on and use a director do not in fact, Chris, I've written a whole new kind of it's not quite an E book yet but it's headed that way. It's it's, it's kind of on the stocks but not quite finished. I mentioned to Chris it's my best kept secret for directors and how they can draw episodes of withdraw money from their business in the most tax efficient way to serve them, their wealth, and their family. And draw you know me Chris, I love a good acronym. Draw D stands for vectors pension that you SAS. R stands for relevant life, which is what we heard from Paul today. And looking at the corporation tax benefits and AI benefits, and Harrison's tax benefits and all those kind of things really, in the end, just much more powerful and it's in trust, you know, which is all live cover needs to be in trust really. A stands for building assets, which is a wealth builder. Principle, of course, but you know, these things can particularly SAS can facilitate the ownership or building recurring income assets inside your company, and recurring income assets outside of your company. And on that subject, Chris, I think soon we'll be hearing from the brilliant Daniel Priestley Won't we about assets and how you can build them in your business? I'm sure he's on your stocks. Definitely. You're trying to get into a podcast near or sometime soon on you.

Christian Rodwell  34:55  
coming real soon. Okay,

Unknown Speaker  34:57  
look out for that one. he's a he's a top guy. So a for assets and then w for well being, I mean, directors fortunately, kind of can control their package and kind of link their their overall personal benefit to the business. And so you can claim and draw things from your money from your from your business rather, for your well being. And that means your well being personally, like you can pay for health checks. You can pay for pension reviews with Fes, all tax deductible, and of course no benefit in kind tax so that it's not imputed as a value. You know, that would normally be the case if you were getting this provided by, you know, typical employer. And the other one, of course, which is quite important, Chris, and certainly appropriate Now, given the environment of cars as we're moving increasingly towards EBS or electric vehicles, is the concept of actually being able to have an electric Vehicle paid for and provided by your company with virtually no personal tax whatsoever. And that's really unheard of. So the electric electric vehicle benefit in kind tax is zero. And the current year means you know, you can have your company provide you with a very nice vehicle, whatever tickles your fancy, and, and the company can pay the cost for that. And it costs you absolutely zero. So as you know, my electric vehicle is on its way to me soon. So looking forward to enjoying that and the company paying for the cost of that and it costing me virtually nothing a little bit next year but 1% next year, but tiny, tiny, tiny, tiny, tiny, compared to if I was an employee, you know, most of these things you do is employ employed people you know, you just don't you don't get that same benefit. So, anyway, hopefully that will be useful. We all can cover that on another day, Chris.

Christian Rodwell  37:02  
Yeah, we can probably dig into more detail and record and we could put together a freebie as well to help our listeners with that as well.

Unknown Speaker  37:08  
Oh, yeah, I can definitely create a guide to draw the Dr. Ray who maybe I can do that within the next few podcasts, Chris, something like that. Yeah,

Christian Rodwell  37:19  
yeah. Sounds good. Now, Kevin, at the beginning, you talked about the relevant life insurance actually, in some cases being cheaper. So a wealth building less and we always talk about is if you're making a saving, and especially we talk about this within our debits process, and on average members in our seven steps to wealth programme when they go through this finding around about 800 pounds a year as an average saving that could be anything up to about 3000. But it's important that you then reinvest that money back into wealth building, you know pillars, so that it doesn't just fall through the cracks and disappear because it's very easy for that to happen.

Unknown Speaker  37:55  
Yeah, and relevant life is An important part of that process actually, because as I said, if you can save 50% of the cost, and pass the cost on to your business, then it costs you nothing from your personal income at all. And so consequently, that frees up not just the saving, because the company is paying for it, and the company's tax deductible, you know, so there's a huge benefit there. So, I think Paul, summarised very ably actually, all of the different benefits and I think it's hard to argue with any of those, the only the only thing I think is, is kind of just be mindful of, and I've spoken to some of our members about this when they get excited about it, and understandably so. If you've had any kind of a health scare, or you've had whatever person surance for four decades, then obviously insurance is underwritten, you know, some insurance company because it's the same insurance rate. So the same insurance company is going to underwrite you from a risk perspective. So if you took out insurance when you were 25, and you now 50, probably, it's not going to make as much sense because you know, you're so much older. Or if you've had a health scare, then you may not get insurance. So it's just be mindful that this is a potential benefit. And please never ever cancel anything that you've got, until you've had a conversation. As Paul mentioned, with a professional and anybody who's interested in this, Chris, if they drop an email to Hello, at wealth builders code at UK, and just say relevant life, then one of our experts will be more than happy to try and help you understand the pros, the cons for a pro balance, and also to do a free check on, you know, what the cost might be compared to any cost you're paying. So, you know, we're always keen to help but we don't want anybody to rush out Get excited about what we're saying, cancel what they've got and find a major mistake. You know, we don't want that to happen for anybody.

Christian Rodwell  40:06  
Yeah. And obviously the topic of insurance really falls I guess within the roof doesn't it, which is part of our end to end process for helping our members build and create, build and protect their wealth and protection of your assets is covered. In episode eight, we talked about the roof. And then in Episode 23, we talked about trusts as well, for anyone who perhaps is still a little bit unsure of the role of how a trust works, which actually Paul did somewhat pretty well, in today's episode.

Unknown Speaker  40:31  
Yeah, indeed. And look, all life cover should really be interest. Because, I mean, the simple point, I'm not sure if you mentioned it specifically, I think he was talking most mostly about the benefit in terms of the accessibility for the beneficiaries. But if you think about it from a different perspective, one of the things we know about people is you know, they put off the boring stuff, right? So they put Off the pension ban, they put off the light cover bit, they'll put off the roof bit one day. We know this is true. And if for example, you've got live cover, but you don't have a will, then if you don't have the life policy in trust, which is just a simple document, it's nothing. It's a tick box really nothing more than a single pager that you sign you have witnessed. If you do not have the interest, and you don't have a will see you've now got a problem, you've left your family. The problem is this. Without the trust, which says go immediately go directly do not pass go do not go through the will go straight to beneficiary. That's what the trust does. In the absence of a trust, the insurance company needs a death certificate, and they need grounded probate. If you don't have a will, you're not going to get probate. If you go Complicated financial situation multiple properties, multiple businesses, if even if you've got a will, probate can take years, which means while the probate is being sorted, or if you don't have a will, you're in a mess. Your family members will not get a check from the insurance company to take care of financial turmoil at a time, the worst time when they're going through emotional turmoil. So I would say for the sake of understanding, and for a one page document that costs us zero in pounds, no pounds, cost nothing. To put a life policy in trust. You just have to have someone to do it for you. We have to ask the insurance company for the trust document. You write down the name of the beneficiaries you tick you wanted in trust, and you get it witnessed. Job done. This is so simple, but so overlooked like so many good things in wealth, Chris You know, people get caught up with what sounds sexy, what sounds interesting, and they don't take care of things, that in the end, if they were looking back, they would wish they had taken care of as I'm sure my old man would have liked to have done the right thing. He had good intentions, bad execution, please don't fall into that trap. If you listen to this, take a minute, go and check your life cover. Go check with you wills in place. And if they're not, give us a call and we will help you. There's no point leaving the roof to chance. A leaky roof is not a good thing.

Christian Rodwell  43:35  
Yeah, important lessons to end on there. And I will link to both of those episodes in the show notes. So episode eight, which we cover the roof and then Episode 23, where we talk about trust in more detail there. Oh, thank you, Kevin. And

Unknown Speaker  43:50  
we're on my soapbox a bit there. Chris. I get quite emotional about these things just because I see the consequences. You know, we're dealing with people all the time and we see the contract winces of people getting ill, people dying and so on. And we know the pain that these things cause and it's not too difficult to, at least, you know, put your house in order so to speak. And so, you know, I'll keep banging on that drum, I suppose now, forever until until people take action. If one person listening to this takes action today, then you know, let us know actually, let us know that we inspired you to take action, you did it, put it in the Facebook group or drop us an email. We'd love to hear from you because our role is to change people, not just to get on soapboxes. Thank you, Kevin. Thank you everyone for listening today, and we'll catch up on the next episode of wolf talk. Okay, Chris. Until then, see ya.

Unknown Speaker  44:43  
We hope you enjoy today's episode. Don't forget that we are constantly updating our resources inside the wealth builders membership site to help you create, build and protect your wealth. Head over to wealth builders.co.uk slash membership right now for free access. That's wealth. dot co.uk slash membership