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HMRC internal manual

Lloyd's Manual

Names: special reserve funds: transfers in: example

2003 closed account 174680
2003 run-off account (8758)
Earlier years closed or in run-off (19806)
Total 146116
Less adjustments  
* Members’ agent salary (10265)
* Lloyd’s Charities Trust (375)
Net profit 135476

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.