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Discuss the tax treatment of the proceeds of policy

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Reference no: EM133253358

Daniel Fox (he/him/his) and his business partner, Dylan (them/they), run a company called Facts Pty Ltd together. Dylan is the creative brain behind Facts Pty Ltd. The business has taken out a life and total and permanent disability (TPD) insurance policy on Dylan's life so that if they died or became permanently disabled the business would be able to re-pay the loans that were taken out with Dylan as guarantor. Facts Pty Ltd owns the insurance policy and pays the premiums. Ten months later, Dylan has an accident that leaves them with a total and permanent disability. Facts Pty Ltd receives the proceeds of the TPD insurance policy.

Discuss the tax treatment of the proceeds of this policy.

Reference no: EM133253358

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