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Are income protection policy contributions still tax deductible?

10 March 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

The answer to this query is based on legislation as at 2014/03/10.

Q: Could you please advise us of the following.  Are income protection policy contributions still tax deductible for tax individual taxpayers.  Some guides are giving a definite clause that they are no longer deductible whilst other are just ignoring the fact. 


A: As from 1 March 2015 (2016 tax year):- Any premiums paid by an employer for the benefit of an employee will be treated as a taxable benefit;- The employee will not be entitled to a tax deduction of the corresponding value;- An individual will not qualify for a tax deduction in respect of his or her premium paid; and- All policy pay-outs will be tax-free, irrespective of whether historical premiums qualified as tax deductions and irrespective of whether the policy pay-out is in the form of a lump sum or an annuity.- Notwithstanding the increase in PAYE to be suffered by an employee, employers will also bear an increase to their skills development levies and unemployment insurance fund contributions costs.


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