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HMRC internal manual

Lloyd's Manual

Names: background to the tax rules

Individual members of Lloyd’s are taxed as insurers. In this context, partnerships are transparent and so partners in Scottish Limited Partnerships and in Limited Liability Partnerships count as individual members. The trading profit or loss of a Name from Lloyd’s business is the sum of

  • the relevant shares of the underwriting profit or loss of the syndicates in which the member participates
  • the investment income from assets used by the member in connection with the Lloyd’s business
  • other income received and expenses paid in connection with the Lloyd’s business, principally ‘member level’ insurance (LLM5180), transfers to and from the special reserve fund (LLM5230), and personal expenses (LLM5150).

However, gains and losses that arise on the disposal of assets used in connection with the underwriting business (that is, on ancillary trust fund assets - see LLM5060) are excluded from trading profits. Any chargeable gains are assessed to CGT on the Name personally.

As members are taxed as traders, the rules that apply generally on the computation and assessment of trade profits, and on loss relief, National Insurance contributions, etc. also apply to Lloyd’s members. And the normal tax rules have to be adapted to accommodate the unique business structure of Lloyd’s. In particular, this affects the basis of assessment (LLM5290).