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HMRC internal manual

Lloyd's Manual

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HM Revenue & Customs
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Capital gains: Names: syndicate capacity: background

Chargeable occasion

The nature of syndicate capacity and how it may be acquired and disposed of isdiscussed at LLM1120 onwards.

For individual members a disposal of syndicate capacity is the disposal of a chargeableasset within the capital gains tax rules. This means that sales proceeds are not tradingreceipts and neither are the purchase price or associated costs allowable as deductionsfrom trading profits.

Pre-emptions and de-emptions

These are described at LLM1130. Neither pre-emption norde-emption are chargeable occasions for CGT purposes.

However, if the pre-emption rights are sold at auction, then this is a sale of a separateright, and is chargeable. There is no part disposal of syndicate capacity.

Transactions in syndicate capacity

Syndicate capacity can be disposed of by being sold, exchanged or transferred.

LLM8020 deals with acquisition costs and disposal proceeds.

LLM8030 deals with incidental costs and initial fees on joiningLloyd’s.

LLM8040 deals with acquisitions of additional capacity in thesame syndicate.

LLM8050 deals with indexation and taper relief.

LLM8060 has an example of a straightforward computation.

LLM8070 deals with mergers between syndicates.

LLM8080 explains reversion to the managing agent.

LLM8090 explains transfer to a successor vehicle as part of aconversion scheme.

LLM8100 explains the treatment of syndicate capacity thatbecomes valueless, for example, where there is no successor syndicate in which toparticipate.

LLM8110 onwards explains the CGT treatment of a transfer ofcapacity as part of a subscription to a MAPA operator, and of disposals of MAPA holdings.