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HMRC internal manual

Lloyd's Manual

Corporate members: background

Lloyd’s first admitted limited company corporate members to underwrite in the 1994 account and by 2005 corporate members made up 90% of the total capacity of the Lloyd’s market.

Corporate members may or may not be UK resident. The trade of underwriting at Lloyd’s is however carried on at the Lloyd’s building in London, so a non-resident corporate member has a UK permanent establishment which carries on its business of underwriting at Lloyd’s. All corporate members which are non-UK resident are therefore brought within the charge to corporation tax by ICTA88/S11.

The business of a corporate member is restricted by Lloyd’s rules to that of underwriting ‘insurance business at Lloyd’s for its own account and directly ancillary activities’. Ancillary activities may include reinsurance, and management of the investments in trust funds. Corporate members are often part of a group structure, and other group members may have other activities.

The tax rules explained in this section of the Lloyd’s Manual apply equally to ‘large corporates’ (that is, companies that are members of major UK and foreign owned groups), and to the small ‘one man’ companies known as Namecos. In addition, the ‘close company’ tax rules usually also apply to Namecos. See LLM6050 for more on Namecos and the Company Taxation Manual CTM60000+ for more on close companies (see LLM10000).

Corporate members prepare and submit accounts to HMRC in the same way as any other company. The Large Business Service Financial Sector deals with the accounts of all corporate members, except Namecos which are dealt with by the Local Compliance Small and Medium Enterprises (SME) Team (Bradford).