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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: acquisition and disposal: enhancement expenditure

Capacity in any particular syndicate is difficult to characterise given the ‘annualventure’ nature of the syndicates (LLM1080), but isregarded as a single asset for capital gains tax purposes. See the discussion at LLM4210.

Further purchases of capacity in a syndicate in which the Name already holds some capacitywill be treated as enhancement expenditure, unless the Name disposes of all capacity inthe syndicate at some stage. In that case the first new acquisition of capacity after thecomplete disposal would be treated as acquisition of a new asset.

Where however a Name has capacity in a syndicate on a bespoke basis, but also participatesin the same syndicate via one or more Members’ Agent Pooling Arrangement (MAPA), thebespoke capacity is regarded as a different asset from the capacity held via the MAPA, seeLLM1150.

The tax consequences of transactions in capacity held via a MAPA are discussed at LLM8110.