How can your company provide you with financial security?
As a director of your own company, you have spent time, energy and money watching it grow from an idea into a reality. Now you are reaping the rewards from all your hard work and finally enjoying the lifestyle that you and your family deserve.
Providing for your family
You are now living the dream, but how does your family maintain this lifestyle if you are no longer around?
Let me ask you a couple of questions:
- Is financial security important to you?
- Would you like to save Tax and National Insurance
If so, why not let the business you have worked so hard to grow, provide you with the financial security for your loved ones?
Financial security for your loved ones
No-one can predict the future but if you unexpectedly died, how would your family cope financially? How would they pay the mortgage, household bills or childcare? What would easing the financial strain on your family mean to you? Have you even had this conversation with your loved ones?
Think about the following questions, do you know the answers?
- Do you have existing plans in place in the event of your death?
- How are these set up?
- Are you happy with your current plans?
- Are they still fit for purpose?
- Were the plans set up a long time ago and never been reviewed?
Perhaps a plan was put in place before you had children or only originally designed to pay off the mortgage? Have you got married since then, or has your relationship ended? Maybe your business has become much more successful? It is essential to ensure that anything you have put in place in the past is still relevant to your current circumstances – download MRA’s free guide for more information.
Business planning for the unexpected
Now ask similar questions for your business:
- What happens to my company shares if I pass away?
- Do they have a value? If so, how are they valued?
- Is the value of the shares paid out to my spouse or family?
- Does your spouse or family understand how this works?
- What if your spouse or family receive nothing from the company on your death. How will they feel?
- What is the effect on the company and how does the company continue?
- Who would suffer?
Having appropriate cover in place is one of the most critical decisions that you can make for your family? How does your family pay for your funeral? Why would you not want peace of mind for you, your family and your business?
What you can do
So, how can your company provide you with financial security? There are solutions available that put the appropriate financial support in place to cover all the issues we have been discussing. Why not also let your company pay the plan premiums for the benefit of your family?
After all, who would you like to pay the premiums you or your business?
Along with saving Tax and National Insurance other advantages include:
- No benefit in kind taxation
- Premiums are a qualifying business expense saving Tax and National Insurance
- Benefits paid tax-free and directly to your family
Whether you are a sole director or a multi-director firm, you can benefit from this type of financial protection. You can also reward valuable employees by offering them the same benefits to their family.
Wouldn’t you prefer to be better prepared if something were to happen to you or another director in your company?
Wouldn’t you want added financial security that either your family or another director’s family can continue with life after death?
Consider seeking professional financial advice to ensure that you have the appropriate financial protection in place to cover your business, family, colleagues and employees. Working with a professional, they will help you discover what you need on a business and company level, and help you understand all the potential benefits and financial implications of any decisions. Giving you peace of mind that the plans you put in place will provide a brighter financial future for those you care about and your company.
If you found this information useful you may also want to check out the following:
- Are you making the M.O.S.T. of your business?
- Avoid the mad march rush – get a head start on your tax planning
- Why you need stakeholder and business loan protection!
MRA help individuals, businesses and families achieve the best quality of life they can with the resources they have. MRA specialise in corporate solutions, cash-flow analysis, taxation, debt management, savings and investments, lifestyle planning and much more.
Business Consultants based in East Sussex we service clients across the South East, Sussex and Kent, including smaller towns such as Ashford, Battle, Bexhill, Bodiam, Brighton & Hove, Cranbrook, Crowborough, Eastbourne, Hailsham, Hastings, Heathfield, Herstmonceux, Lewes, Mayfield, Newhaven, Rye, Seaford, Sevenoaks, Tenterden, Tonbridge and Tunbridge Wells.