The Income Tax Act has laid down very strict rules regarding what insurance premium qualifies as a business or personal expense. There is the misconception that as long as the business owns an insurance policy the entire premium is a tax write-off for the business.Our experience has shown the following as areas where the misconception is very serious:
The tax consequences of the above, when detected by the tax department during an audit, are very harsh. As Corporate Insurance Specialists, we do our best in working with clients to ensure that we cover all bases to prevent any surprises. Furthermore, when installing a Shareholders Agreement, we work with client's lawyers and accountants to ensure that the structure of the Shareholders Agreement is in tandem with the structure of the insurance contracts.