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HMRC internal manual

Lloyd's Manual

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HM Revenue & Customs
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Names: income from ancillary trust funds (‘ATFs’): introduction

Income from ancillary trust funds (ATFs, part of Funds at Lloyd’s, see LLM1200) is taxable in the corresponding underwriting year in which it is received - FA93/S172 (1)(c) (LLM5290).

For instance, on 28 February 2006, a Name receives a dividend of £900 (with a tax credit of £100) from shares held in an ATF. In the 2006-07 Lloyd’s pages of his SA Return, the Name will include £1,000 in Part 1 (income from Funds at Lloyd’s). This amount is then added in to the Case I Lloyd’s trading profits for 2006-07. The tax credit of £100 is included in the total amount of tax already paid for 2006-07 and is set off against the tax due from the Name on Lloyd’s Case I income for 2006-07 (although it cannot be repaid).

If Lloyd’s trade income is insufficient to set off the entire £100, the tax credit cannot be set off against other income. The Name should not show the dividend or the tax credit separately in any other part of the Tax Return.

To compute the amount of income arising on the asset, the computational rules applicable to that type of income are used, but by reference to the calendar year that ends in the tax year, rather than the tax year itself.

  • LLM5070 deals with ATF securities that are Accrued Income Scheme (AIS) securities.
  • LLM5080 deals with other types of ATF securities.
  • LLM5090 deals with taxed income in ATF income.
  • LLM5100 deals with dividends in ATF income.
  • LLM5110 deals with foreign tax in ATF income.

LLM8170 deals with capital gains on assets within ancillary trust funds.