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HMRC internal manual

Lloyd's Manual

Names: capital gains tax and inheritance tax: contents

The guidance at LLM8010 onwards summarises the main capital gains tax (CGT) and inheritance tax (IHT) issues that affect individual members of Lloyd’s. Detailed guidance on CGT is to be found in the Capital Gains Manual (CG10200+) and on inheritance tax in the IHT Manual (IHTM01000+). The Capital Gains Manual contains some specific material on Lloyd’s at CG24000+. Links to these manuals can be found at LLM10000.

Individual partners in Scottish limited partnerships (SLPs – see LLM6060) and Limited Liability Partnerships (LLPs – see LLM6150) are subject to the same CGT and IHT rules that apply to individual Names.

For corporate members, the profits and gains from assets employed in, or in connection with their underwriting business are taxable under Case I of Schedule D (LLM4050) and no CGT or IHT issues arise. Participators in such companies may be subject to CGT or IHT.

Capital gains issues after 1994 for individual Names mainly relate to the treatment of Lloyd’s syndicate capacity. Until 1993-94, syndicate chargeable gains were chargeable to CGT, but since 1994 they have been included in the Lloyd’s trading result and within the charge to income tax.

The material in this chapter deals with

  • CGT on ‘bespoke’ syndicate capacity at LLM8010 onwards;
  • CGT on Members’ Agent Pooling Arrangements (MAPAs) at LLM8110 onwards;
  • CGT on other assets, mainly ancillary trust funds (ATFs) at (LLM8170) and special reserve funds (SRFs) at (LLM8180);
  • the application of the various CGT reliefs at LLM8190 onwards (see LLM6160 for details of the ‘conversion reliefs’ that were introduced in FA 2004);
  • the valuation of the Lloyd’s interest and business property relief for IHT at LLM8260 onwards.
  1. LLM8010
    Capital gains: Names: syndicate capacity: background
  2. LLM8020
    Capital gains: Names: syndicate capacity: acquisition and disposal: consideration
  3. LLM8030
    Capital gains: Names: syndicate capacity: acquisition and disposal: incidental costs
  4. LLM8040
    Capital gains: Names: syndicate capacity: acquisition and disposal: enhancement expenditure
  5. LLM8050
    Capital gains: Names: syndicate capacity: disposals: indexation and taper relief
  6. LLM8060
    Capital gains: Names: syndicate capacity: disposals: computation of gain or loss
  7. LLM8070
    Capital gains: Names: syndicate capacity: disposals: syndicate mergers
  8. LLM8080
    Capital gains: Names: syndicate capacity: disposals: reversion to managing agent
  9. LLM8090
    Capital gains: Names: syndicate capacity: disposals: conversion
  10. LLM8100
    Capital gains: Names: syndicate capacity: negligible value
  11. LLM8110
    Capital gains: Names: syndicate capacity: MAPAs: introduction
  12. LLM8120
    Capital gains: Names: syndicate capacity: MAPAs: years of assessment up to and including 1998-99 (1)
  13. LLM8130
    Capital gains: Names: syndicate capacity: MAPAs: years of assessment up to and including 1998-99 (2)
  14. LLM8140
    Capital gains: Names: syndicate capacity: MAPAs: years of assessment up to and including 1998-99 (3)
  15. LLM8150
    Capital gains: Names: syndicate capacity: MAPAs: years of assessment 1999-2000 onwards (1)
  16. LLM8160
    Capital gains: Names: syndicate capacity MAPAs: years of assessment 1999-2000 onwards (2)
  17. LLM8170
    Capital gains: Names: Ancillary Trust Funds
  18. LLM8180
    Capital gains: Names: Special Reserve Funds
  19. LLM8190
    Capital gains: Names: reliefs
  20. LLM8200
    Capital gains: Names: retirement relief
  21. LLM8205
    Capital gains: Names: entrepreneurs' relief
  22. LLM8210
    Capital gains: Names: reinvestment relief
  23. LLM8220
    Capital gains: Names: rollover relief
  24. LLM8230
    Capital gains: Names: relief for gifts of business assets
  25. LLM8240
    Capital gains: Names: indexation and taper relief
  26. LLM8250
    Capital gains: Names: non resident Names
  27. LLM8260
    Inheritance tax: Names: introduction
  28. LLM8270
    Inheritance tax: Names: valuation of the Lloyd’s interest
  29. LLM8280
    Inheritance tax: Names: valuation of the Lloyd’s interest: discounts
  30. LLM8290
    Inheritance tax: Names: business property relief
  31. LLM8300
    Inheritance tax: Names: business property relief: rate of relief
  32. LLM8310
    Inheritance tax: Names: business property relief: interavailability