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HMRC internal manual

Lloyd's Manual

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HM Revenue & Customs
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Corporate members: cessation of underwriting business

When a corporate member, for whatever reason, including winding up, ceases to carry on its underwriting business, the final underwriting year is the year in which its Lloyd’s Deposit is paid over to the corporate member or to its liquidator. The corporate member’s underwriting business is deemed to carry on until the end of that year (even if it has resigned its membership of syndicates at an earlier date) and thus it continues to be taxed under the Lloyd’s taxation provisions until that date (FA94/S227).

SI1995/351, regulation 16 makes additional provision to cover further circumstances that might arise on cessation of underwriting

  • if Lloyd’s invites the corporate member or its agent to apply for the release of its deposit, the final underwriting year cannot be later than the year which contains the date 180 days after the date the letter was issued; this covers the case where the corporate member fails, for whatever reason, to recover its deposit, though the final underwriting year may be earlier if it is triggered by some other event
  • if the deposit in the event is paid over to a person other than the corporate member the final underwriting year is the year in which it is paid over, or, if earlier, the year in which falls the date 180 days after Lloyd’s issues the letter described above
  • if Lloyd’s releases the corporate member, or any other person, from an arrangement which has been entered into to supply the corporate member’s deposit requirement, the final underwriting year is that in which such release occurs except where the release occurs before the closure of the last open year of account of any syndicate to which the corporate member belongs
  • in any case where the deposit is released or extinguished before the closure of the last open year of account of any syndicate to which the corporate member belongs, the final underwriting year is the year following that of closure, or, if later, the year in which the corporate member ceases to be a member of Lloyd’s; the last open year of account is regarded as closed for this purpose when the member is treated as having discharged all its Lloyd’s liabilities - either by the actual closure of the syndicate accounts, or by the member entering into a quota share contract.