Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Lloyd's Manual

Names: income from ancillary trust funds (‘ATFs’): Accrued Income Scheme (‘AIS’)

“Accrued income securities” includes all interest bearing securities, including shares in a building society and gilts, but does not include shares in a company, National Savings certificates and war loan certificates. SAIM 4000+ (see LLM10000) gives full details of the scheme.

Under the AIS no charge arises and no allowance is due for a tax year if the total nominal value of all accrued income securities held at any time in that year or the preceding tax year did not exceed £5,000. If the aggregate of the nominal values of all such securities held by a Name, both as part of their personal and premium trust funds at Lloyd’s and as part of their personal non-Lloyd’s investments, is less than £5,000 in the relevant periods then no charge arises and no allowance is due.

Where such a charge applies, for purchases and sales of such securities held as part of personal Funds at Lloyd’s, the amount to include in trade profits for a tax year is the amount that would be computed, either as an allowance or a charge, for those securities under the rules of the AIS for the appropriate period. This period is the calendar year ending in the tax year.

Although the computational rules of the AIS are used to work out the amounts of income or expense that arise when a Name purchases or sells such securities, the resulting amount is included in trading results for resident and non-resident Names alike. The only exceptions for non residents are for non-UK securities and FOTRAs (LLM5440).

Calculation of AIS allowance or charge

The corresponding year rules that determine the tax year to which Lloyd’s ATF income is related mean that some adjustment is needed to the dates used to determine the AIS charge. Where there has been a purchase or sale between 6 April and 31 December in one tax year, an AIS charge or allowance might arise if the next payment of interest was due between the calendar year, 1 January and 31 December, following, rather than being linked to sales in one tax year and the next interest payment due in the following tax year.

For example, if, following purchase or sale of such a security between 6 April and 31 December 2006, the next payment of interest following the date of transfer of that security would fall between 1 January and 31 December 2007 inclusive, a charge would arise if that security was purchased ex-dividend or sold cum-dividend.

If a Name holds such securities both as part of personal Funds at Lloyd’s and as part of personal non-Lloyd’s investments, the AIS allowance or charge shown on the Lloyd’s Pages should not be reflected on the main part of that year’s SA Tax Return.