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HMRC internal manual

Lloyd's Manual

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HM Revenue & Customs
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Reinsurance to close (RITC), technical provisions and equalisation reserves: introduction

Reinsurance to close and technical provisions

GIM Chapter 6 (see LLM10000) addresses the special tax issues that relate to technical provisions of general insurance companies. Similar issues arise in relation to reinsurance to close (‘RITC’) and, for open syndicates, technical provisions for Lloyd’s syndicate members. GIM6080 explains the background to the introduction of FA00/S107 and the General Insurance Reserves (Tax) Regulations 2001, SI2001/1757. This legislation applied specific and complex tax rules to the taxation of technical provisions of a general insurer, including Lloyd’s underwriting members. These rules are described at GIM6150 to GIM6340 and the corresponding rules and adaptations for Lloyd’s members are at LLM3010 to LLM3200 in this Chapter.

LLM3210 explains a special rule that applied to RITC before the introduction of FA00/S107.

GIM6510+ explains the rules for general insurance companies following the repeal of FA00/S107 by FA07/SCH11. The corresponding rules and adaptations for Lloyd’s syndicates are at LLM3300 to 3330 below.

Equalisation reserves

FA09/S47 empowers the Treasury to make regulations extending existing equalisation relief, given to general insurance companies for the equalisation reserves they are required by the Financial services Authority to establish, so that it may also benefit corporate and partnership members of Lloyd’s who choose to establish ‘equivalent Lloyd’s reserves’. The effect of these regulations, The Lloyd’s Underwriters (Equalisation Reserves) (Tax) Regulations 2009, SI2009/2039, is described at LLM3400+. Equalisation reserves recognise the volatile and fluctuating results associated with certain general insurance business classes.

  1. LLM3010
    Section 107 FA2000: application to Lloyd's members: general
  2. LLM3020
    Section 107 FA2000: application to Lloyd's members: the 4% rule
  3. LLM3030
    Section 107 FA2000: application to Lloyd's members: periods affected
  4. LLM3040
    Section 107 FA2000: adaptations for Lloyd's members: meaning of technical provisions
  5. LLM3050
    Section 107 FA2000: adaptations for Lloyd's members: changes in a member’s share of a syndicate’s business
  6. LLM3060
    Section 107 FA2000: adaptations for Lloyd's: changes in a member’s share of a syndicate’s business: examples
  7. LLM3070
    Section 107 FA2000: adaptations for Lloyd's members: the declarations basis and the 'one-year later' rule
  8. LLM3080
    Section 107 FA2000: adaptations for Lloyd's members (page 1 of 3): regulation 7(1) to (3) of the GI reserves tax Regulations
  9. LLM3090
    Section 107 FA2000: adaptations for Lloyd's members (page 2 of 3): regulation 7(4) and (5) of the GI reserves tax regulations
  10. LLM3100
    Section 107 FA2000: adaptations for Lloyd's members (page 3 of 3): regulation 7(6) to (11) of the GI reserves tax regulations
  11. LLM3110
    Section 107 FA2000: particular difficulties
  12. LLM3120
    Section 107 FA2000: further help available: the 'Lloyd's Calculator'
  13. LLM3130
    Section 107 FA2000: example: member increases their share of a syndicate’s business (page 1 of 4)
  14. LLM3140
    Section 107 FA2000: example: member increases their share of a syndicate’s business (page 2 of 4)
  15. LLM3150
    Section 107 FA2000: example member increases their share of a syndicate’s business (page 3 of 4)
  16. LLM3160
    Section 107 FA2000: example member increases their share of a syndicate’s business (page 4 of 4)
  17. LLM3170
    Section 107 FA2000: example: member reduces their share of a syndicate’s business (page 1 of 4)
  18. LLM3180
    Section 107 FA2000: example: member reduces their share of a syndicate’s business (page 2 of 4)
  19. LLM3190
    Section 107 FA2000: example: member reduces their share of a syndicate’s business (page 3 of 4)
  20. LLM3200
    Section 107 FA2000: example: member reduces their share of a syndicate’s business (page 4 of 4)
  21. LLM3210
    Taxation prior to section 107 FA 2000
  22. LLM3300
    Taxation following repeal of section 107 FA2000: the appropriate amount: adaptations for Lloyd’s members
  23. LLM3310
    Taxation following repeal of section 107 FA 2000: the appropriate amount: adaptations of FA07/SCH11
  24. LLM3320
    Taxation following repeal of section 107 FA 2000: appropriate amount Regulations SI2009/1926: application to members of Lloyd’s syndicates
  25. LLM3330
    Taxation following repeal of section 107 FA 2000: the appropriate amount: application to Lloyd’s syndicates: amendment of the administrative regulations for enforcement purposes
  26. LLM3400
    Equalisation reserves for corporate and partnership members: background
  27. LLM3410
    Equalisation reserves for corporate and partnership members: scope of relief
  28. LLM3420
    Equalisation reserves for corporate and partnership members: equivalent Lloyd’s reserve
  29. LLM3430
    Equalisation reserves for corporate and partnership members: application of the section 444BA ICTA rules
  30. LLM3440
    Equalisation reserves for corporate and partnership members: election not to take a tax deduction
  31. LLM3450
    Equalisation reserves for corporate and partnership members: cessations
  32. LLM3460
    Equalisation reserves for corporate and partnership members: anti-avoidance
  33. LLM3470
    Equalisation reserves for corporate and partnership members: repeal