In reasonably short succession two very different conversations: an adviser arguing for taxable benefits, and another arguing for non-taxable benefits. Here is a summary of their key points:
For a taxable benefit:
- Secures the maximum benefit
- Can get a tax deduction today (depending on who you talk to)
- May not claim…
- May not need to pay tax if I do claim… (depending on the rules at the time)
For a NON-taxable benefit:
- Pay less today without having to claim a rebate (simpler)
- Clearer: no before/after tax difference with either premium or benefit
- May not claim… so why buy a higher taxable amount
- No need to involve the accountant at claim time or run the risk of getting it wrong
Interestingly I have been advised of a case where a claimant is in trouble with Inland Revenue for non-payment of tax on an IP benefit, but that should be no obstacle to the sale of a taxable product: it just means that they need financial advice.