Schedule 34 - Policies of life insurance etc: miscellaneous amendments
Finance Bill
8:55 am
Mr Howard Flight (Arundel and South Downs, Conservative)
The Economic Secretary's argument is unclear. It is one thing to say that such a policy would not be used by a partnership. It is entirely different to say that the clause is specifically designed to exclude partnerships benefiting from the key man insurance of one of their partners, which is unreasonable. The Government have encouraged the use of limited partnerships as an alternative to a corporate structure. Like a company, a limited partnership faces severe risks if a key person working within it dies and their earnings cease. I cannot see any reason why a limited partnership should not have key man insurance in a fair and tax-efficient fashion. Will the Economic Secretary clarify his comments?