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HMRC internal manual

Lloyd's Manual

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Reinsurance to close (RITC) and technical provisions: section 107 FA2000: application to Lloyd's members: periods affected

The FA00/S107 rules applied to the technical provisions made in periods of account beginning on or after 1 January 2000. The first period of account in which adjustments were made under the GI reserves tax Regulations was the first to begin on or after 1 January 2001, that is, the calendar year 2001.

For Lloyd’s members, FA00/S107 (7) tied ’periods of account’ to the year in which profits were declared. The first RITC premium to which the rules applied was for the 1997 year of account declared in 2000.

The first RITC premium in respect of which adjustments could be made was that paid by 1998 syndicates (or run-off syndicates) declaring in 2001, by comparison with the RITC premium paid for the 1997 period of account.

The last period of account for which adjustments were made was that which affected profits for any period ending on or after 19 July 2007 (FA07/SCH11/PARA5), which under the declaration basis means 2007. That affects 2004 syndicates (or run-off syndicates) declaring in 2007. In addition, a limited transitional relief applied to enable RITC or technical provisions to be disclaimed for periods beginning on or after that date, which affects syndicates declaring in 2008. There is more about the transitional relief at GIM6180.