Can a landlord claim for life insurance?
If a lanldord is bound to take out life cover as part of his lending agreement can that deduction be claimed against rents?
I appreciate that the thing covered is not really a business matter (ie death) but without the insurance they would not be given finance and hence the business would suffer. On the grounds therefore that the cost is wholly and exclusively for the purposes of the business can this be claimed?
If a decution can be claimed I presume this would not however make any payout taxable as the proceeds would not be connected to lost rents, damage to the property or indeed anything else to do with the property?
If no deduction is there any way the insurance can be restructed to be some sort of "key man" type policy?
Many thanks in advance for any thoughts.
Incidental Costs
I have read the BIM section but the legislation it refers to simply does not provide text to substantiate HMRC's view. If this chap does not have the insurance his finance will be withdrawn. Is it not therefore arguable that each month's premium secures the finance for the following month?
Reply to Oxontax
Sole reason for payment is requirement by bank in order to obtain finance. The side effect is a capital payment on death. This was not wanted or needed.
BIM45525
HMR&C will certainly dispute any claim. They say in the business income manual:
Endowment policies on the life of a key person may be taken out as a condition of the provision of long-term finance. The premiums on such policies are not regarded as ’incidental' to obtaining the finance within the meaning of ICTA88/S77 (6), so are not deductible.