Tax Liability Insurance
Tax Liability insurance (TLI) mitigates costs that arise in respect of identified tax risks stemming from current, pending or historical transactions.
TLI may be of assistance:
- If due diligence has identified a potential tax issue
- By transferring and ring-fencing risk where negotiations have stalled
- By providing certainty in relation to complex tax issues
- To protect a liquidator against ongoing liabilities
- To release capital that has otherwise been provided for in the accounts
- To provide individuals with certainty over their tax affairs
What's not covered?
Transactions that are notifiable under tax avoidance schemes and tax risks already subject to challenge by tax authorities will not generally be covered. Insurers tend to insure risks in jurisdictions where the tax system is developed and the court system is reliable.
How much does it cost?
Premium rates will vary by case, however, as a general guide, they range between 2% – 10% of the limit being insured for the length of the policy (usually seven to 10 years).
Paragon has dedicated in-house tax expertise in placing tax insurance policies all over the world. If you would like to know more about tax insurance please click here.