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HMRC internal manual

Lloyd's Manual

HM Revenue & Customs
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Names: basis of assessment: commencement

No new individual Names have been admitted as underwriting members of Lloyd’s from 1 January 2003. The first tax year for a new individual Name was the tax year following the 1st of January on which their underwriting began. For instance for a Name who first underwrote in the 1998 account, underwriting began on 1 January 1998, and the first tax year as an underwriting member of Lloyd’s was 1998-99.

For purposes of taxing Lloyd’s profits, the corresponding year concept is applied (LLM5290). The commencement provisions in Chapter 15 of Part 2 of the Income Tax (Trading and Other Income) Act 2005 do not apply.

Because of the effect of the ‘declaration basis’ (LLM5290), an individual assessable under the FA 1993 rules will not be taxable on syndicate profits or losses until the fourth year after the commencement of underwriting. The Lloyd’s profits assessable for the first three years will be made up of ancillary trust fund income received and Lloyd’s related expenses paid out in the first three calendar years following the start of the first underwriting year.

Commencement for investors who are members through partnerships is dealt with at LLM6100 and LLM6150.