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HMRC internal manual

Lloyd's Manual

Corporate members: taxation of premium trust fund (PTF) income and gains: the declaration basis

Most PTF income is linked to the declaration basis by FA94/S220 (2)(b)(i). Profits or losses arising from PTF assets are taken to be those allocated under the rules or practice of Lloyd’s to any previous year or years the profits or losses of which are declared in the underwriting year.

So, for example, income allocated by the managing agent to the 2004 syndicate year will be assessed when the results of the 2004 syndicates are assessed. Those results are declared in April/May 2007. For a member making up its accounts for the year ended 31 December, the PTF income and gains allocated to 2004 will therefore be assessed as part of the profits for the accounting period ended 31 December 2007.

As for syndicate profits, apportionment between accounting periods will be required if the member makes up its accounts for any period apart from calendar years, on the basis shown in LLM4070. This does not mean that the Riesco figures (LLM2210) will need to be re-examined - the results given by that formula simply need to be time-apportioned.

In applying FA94/S220 the term ‘underwriting year’ means calendar year. It does not refer in this context to the year in which a particular syndicate writes business, that is, to a Lloyd’s Year of Account (YOA).