Your weekly dose of tax knowledge - become tax savvy in just 2 minutes!
Q: Is key man insurance purchased under the name of a director tax deductible for the company?
A: Key man insurance purchased under the name of a director is a private expenditure hence the premium paid is not allowed for tax deduction. However, if this is a perquisite for the director as stated in the employment contract, it will be tax deductible for the company but is also a taxable income for the director.
Wishing you plentiful tax savings!
YYC Tax Guru