The tax position of Shareholder Protection Insurance depends on which of the three ways you choose to set up the policy.
In some cases, premiums may be a tax deductible business expense against your corporation tax bill. This is common where the benefit passes the wholly and exclusively test, which means it’s entirely for the benefit of the company.
In this case, HMRC typically allows premiums as a business expense where the company itself pays for them.
However, if the benefit is paid to the shareholders, it’s not wholly and exclusively for the benefit of the company. As such, HMRC usually does not consider premiums as a tax deductible expense.
It’s a tricky area, where it’s best to get expert professional advice.