Policy Ownership Information of Keyman Insurance

When deciding how you will structure the ownership of the policy, you need to consider the reason you are taking the insurance. If it is for share purchase, then the ownership is very important. If it is for debt reduction, then you may be able to organise a tax effective way of assigning the ownership. As mentioned above, there is the possibility that CGT will apply to any benefit paid to the company or trust.

Accordingly, it may be effective to have the keyman insurance policy owned by the life insured to avoid the possibility of having to pay CGT, depending on the purpose for which you are taking the insurance.

For more information, please visit the ATO website.

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