TaxTMI 
TaxTMI 
Life Insurance by a trust for its trustee
28 Jul 2010 
2 Replies 
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Trust-held life insurance for a trustee: tax treatment follows ordinary business-entity principles, subject to trust-deed limits.
Whether a trust may procure a life insurance policy for its trustee turns on the trust deed's authority and purpose limitations, the nature and status of the trustees, and policy particulars; if permitted, tax consequences are to be assessed on principles akin to those for ordinary business entities, focusing on premium characterisation and the tax treatment of maturity proceeds for the trust or trustee. (AI Summary)
Whether a trust may procure a life insurance policy for its trustee turns on the trust deed's authority and purpose limitations, the nature and status of the trustees, and policy particulars; if permitted, tax consequences are to be assessed on principles akin to those for ordinary business entities, focusing on premium characterisation and the tax treatment of maturity proceeds for the trust or trustee. (AI Summary)
Can a trust take a life insurance policy for its trustee.What will be the tax impact on the trust and its trustee at the time of maturity and what will be the tax treatment for payment of premium.