Contributions to a scheme through which an employee (or his dependents) will gain a direct benefit are now taxable (as of March 2012).
If, for example, a contribution to a group life scheme is made by the employer which includes, for example, a funeral benefit/pay out, the portion of the contribution which goes towards the funeral policy must be taxed as a fringe benefit.
Not as easy to do as it may sound! Most policies don’t stipulate the actual portion of the contribution that is related to the funeral policy. In most cases, the only way to determine this is to discuss with your insurance advisor (and get something in writing to this effect).
Similarly, if there is a group payment (i.e. which covers X number of employees) and there is no specific amount for each individual employee mentioned in the contract, then common practice is to divide the total employees covered by or who are named on the policy by the total contribution thus arriving at a pretty accurate estimate as to the “contribution” value per employee. Once again, discuss with your advisor and make sure you get something in writing.
Contact Dave Beattie for assistance in this regard: [email protected].