Names: special reserve funds: transfers in: example
|2003 closed account||174680|
|2003 run-off account||(8758)|
|Earlier years closed or in run-off||(19806)|
|* Members’ agent salary||(10265)|
|* Lloyd’s Charities Trust||(375)|
The amount that can be transferred is the lesser of
- 50% of syndicate profit of £146,116 (excluding Name’s level personal expenses) = £73,058, or
- the amount required to bring value of SRF up to 50% of Name’s overall premium limit (OPL).
For this purpose, we look at the OPL for the year in which the 2003 account closes (2005) and the OPL for the preceding year (2004). If the OPL was £1,000,000 for 2004, and £800,000 for 2005, then we look at the higher of these figures only.
Limit for SRF transfer purposes = 50% x £1,000,000 = £500,000.
If the value of the SRF before the transfer from 2003 profits is £350,000, then a further £150,000 could be paid in without reaching the limit.
So in this example, the amount which can be paid into the SRF is the lower of £73,058 (based on profits) or £150,000 (based on OPL). The maximum transfer is therefore £73,058.