|
| |
|
(a) | the manufactured dividend is or was paid, or treated as paid, by the |
| |
person on or after 17th March 2004, or |
| |
(b) | the chargeable gain accrues or accrued to the person on or after that |
| |
| |
| 5 |
| |
Lloyd’s names: conversion to limited liability underwriting |
| |
1 | The Finance Act 1993 (c. 34) is amended as follows. |
| |
2 | After section 179A insert— |
| |
“179B | Conversion to limited liability underwriting |
| |
Schedule 20A to this Act (which makes provision for certain reliefs to |
| 10 |
be available where a member converts to limited liability |
| |
underwriting) shall have effect.”. |
| |
3 | After Schedule 20 insert— |
| |
| |
Lloyd’s underwriters: conversion to limited liability underwriting |
| 15 |
| |
Conversion to underwriting through successor companies |
| |
| |
1 (1) | This Part of this Schedule applies if the following conditions are |
| |
| 20 |
| |
(a) | a member gives notice of his resignation from membership |
| |
of Lloyd’s in accordance with the rules or practice of |
| |
| |
(b) | in accordance with such rules or practice, the member does |
| 25 |
not undertake any new insurance business at Lloyd’s after |
| |
the end of the member’s last underwriting year, and |
| |
(c) | the member does not withdraw that notice. |
| |
(3) | Condition 2 is that all of the member’s outstanding syndicate |
| |
capacity is disposed of by the member under a conversion |
| 30 |
arrangement to a successor company (“the syndicate capacity |
| |
disposal”) with effect from the beginning of the underwriting year |
| |
next following the member’s last underwriting year. |
| |
(4) | Condition 3 is that, immediately before the syndicate capacity |
| |
| 35 |
(a) | the member controls the successor company, and |
| |
(b) | more than 50% of the ordinary share capital of the |
| |
successor company is beneficially owned by the member. |
| |
|
| |
|
| |
|
(5) | Condition 4 is that the syndicate capacity disposal is made in |
| |
consideration solely of the issue to the member of shares in the |
| |
| |
(6) | Condition 5 is that the successor company starts to carry on its |
| |
underwriting business in the underwriting year (“the successor |
| 5 |
company’s first underwriting year”) next following the member’s |
| |
| |
(7) | In this paragraph “the member’s last underwriting year”, in |
| |
relation to a member who gives notice of his resignation from |
| |
membership of Lloyd’s, means the underwriting year during |
| 10 |
which, or at the end of which, he ceases to be an underwriting |
| |
member and becomes a non-underwriting member in accordance |
| |
with the rules or practice of Lloyd’s. |
| |
(8) | In this paragraph “outstanding syndicate capacity”, in relation to |
| |
a member, means the syndicate capacity of the member other than |
| 15 |
| |
(a) | the member disposes of to a person other than a successor |
| |
member at or before the end of the member’s last |
| |
| |
(b) | ceases to exist with effect from the end of that year. |
| 20 |
Income tax: carry forward of loss relief following conversion |
| |
2 (1) | This paragraph applies if— |
| |
(a) | the member’s total income for a year of assessment |
| |
includes any income derived by the member from the |
| |
successor company (whether by way of dividends on the |
| 25 |
shares issued to the member or otherwise), and |
| |
(b) | throughout the period beginning with the time of the |
| |
syndicate capacity disposal and ending with the end of |
| |
that year of assessment,— |
| |
(i) | the member controls the successor company, and |
| 30 |
(ii) | more than 50% of the ordinary share capital of the |
| |
successor company is beneficially owned by the |
| |
| |
(2) | The carry-forward provision shall apply as if the income so |
| |
derived were profits on which the member was assessed under |
| 35 |
Schedule D in respect of the member’s underwriting business for |
| |
| |
(3) | But where under the carry-forward provision as applied by sub- |
| |
paragraph (2) above a loss falls to be deducted from or set off |
| |
against any income for any year of assessment, the deduction or |
| 40 |
set-off shall be made in the first place against that part, if any, of |
| |
the income in respect of which the member has been, or is liable to |
| |
be, assessed to tax for that year. |
| |
(4) | In this paragraph “the carry-forward provision” means section 385 |
| |
of the Taxes Act 1988 (carry-forward of trading losses against |
| 45 |
| |
Capital gains tax: roll-over relief on disposal of syndicate capacity |
| |
3 (1) | This paragraph applies if— |
| |
|
| |
|
| |
|
(a) | the aggregate of any chargeable gains accruing to the |
| |
member on the syndicate capacity disposal exceeds the |
| |
aggregate of any allowable losses accruing to him on that |
| |
| |
(b) | the member makes a claim under this paragraph to an |
| 5 |
| |
(2) | The amount of the excess mentioned in sub-paragraph (1)(a) |
| |
above (“the amount of the syndicate capacity gain”) shall for the |
| |
purposes of capital gains tax be reduced by the amount of the |
| |
| 10 |
(3) | For the purpose of computing any chargeable gain accruing to the |
| |
member on a disposal by him of any issued share or any asset |
| |
directly or indirectly derived from any issued share— |
| |
(a) | the amount of the rolled-over gain shall be apportioned |
| |
between the issued shares as a whole, and |
| 15 |
(b) | the sums allowable as a deduction under section 38(1)(a) of |
| |
the Gains Tax Act shall be reduced by the amount |
| |
apportioned to the issued share under paragraph (a) |
| |
above; but, in the case of a derived asset, the reduction |
| |
shall be by an appropriate proportion of that amount; |
| 20 |
| and if the issued shares are not all of the same class, the |
| |
apportionment between the shares under paragraph (a) above |
| |
shall be in accordance with their market values at the time they |
| |
were acquired by the member. |
| |
(4) | In this paragraph “the amount of the rolled-over gain” means the |
| 25 |
| |
(a) | the amount of the syndicate capacity gain, and |
| |
(b) | the aggregate amount of any sums which would be |
| |
allowable as a deduction under section 38(1)(a) of the |
| |
Gains Tax Act if the issued shares were disposed of as a |
| 30 |
whole by the member in circumstances giving rise to a |
| |
| |
(5) | In this paragraph the “issued shares” means the shares in the |
| |
successor company issued to the member in consideration for the |
| |
syndicate capacity disposal. |
| 35 |
Capital gains tax: roll-over relief on disposal of assets of ancillary trust fund |
| |
4 (1) | This paragraph applies if— |
| |
(a) | at the time of, or after, the syndicate capacity disposal, |
| |
assets forming some or all of the member’s ancillary trust |
| |
| 40 |
(i) | withdrawn from the fund, and |
| |
(ii) | without unreasonable delay, disposed of by him to |
| |
the successor company (the “ATF disposal”), |
| |
(b) | the aggregate of any chargeable gains accruing to the |
| |
member on the ATF disposal exceeds the aggregate of any |
| 45 |
allowable losses accruing to him on that disposal, |
| |
(c) | throughout the period beginning with the time of the |
| |
syndicate capacity disposal and ending with the time of |
| |
| |
|
| |
|
| |
|
(i) | the member controls the successor company, and |
| |
(ii) | more than 50% of the ordinary share capital of the |
| |
successor company is beneficially owned by the |
| |
| |
(d) | the ATF disposal is made in consideration solely of the |
| 5 |
issue to the member of shares (the “issued shares”) in the |
| |
| |
(e) | the member makes a claim under this paragraph to an |
| |
| |
(2) | But this paragraph does not apply if— |
| 10 |
(a) | the member could have made a claim under paragraph 3 |
| |
| |
(b) | at the time the member makes a claim under this |
| |
paragraph, no claim under paragraph 3 above is or has |
| |
| 15 |
(3) | The amount of the excess mentioned in sub-paragraph (1)(b) |
| |
above (“the amount of the ATF assets gain”) shall for the purposes |
| |
of capital gains tax be reduced by the amount of the rolled-over |
| |
| |
(4) | For the purpose of computing any chargeable gain accruing to the |
| 20 |
member on a disposal by him of any issued share or any asset |
| |
directly or indirectly derived from any issued share— |
| |
(a) | the amount of the rolled-over gain shall be apportioned |
| |
between the issued shares as a whole, and |
| |
(b) | the sums allowable as a deduction under section 38(1)(a) of |
| 25 |
the Gains Tax Act shall be reduced by the amount |
| |
apportioned to the issued share under paragraph (a) |
| |
above; but, in the case of a derived asset, the reduction |
| |
shall be by an appropriate proportion of that amount; |
| |
| and if the issued shares are not all of the same class, the |
| 30 |
apportionment between the shares under paragraph (a) above |
| |
shall be in accordance with their market values at the time they |
| |
were acquired by the member. |
| |
(5) | In this paragraph “the amount of the rolled-over gain” means the |
| |
| 35 |
(a) | subject to sub-paragraph (6) below, the amount of the ATF |
| |
| |
(b) | the aggregate amount of any sums which would be |
| |
allowable as a deduction under section 38(1)(a) of the |
| |
Gains Tax Act if the issued shares were disposed of as a |
| 40 |
whole by the member in circumstances giving rise to a |
| |
| |
(6) | If the market value, immediately before the ATF disposal, of the |
| |
assets disposed of under that disposal exceeds the amount of the |
| |
ATF assets required, the amount of the ATF assets gain shall for |
| 45 |
the purposes of sub-paragraph (5)(a) above be reduced by |
| |
multiplying it by—![equation: over[char[R],char[T]]](missing.gif) |
| |
| |
|
| |
|
| |
|
| R is the amount of the ATF assets required, and |
| |
| T is the market value, immediately before the ATF disposal, |
| |
of the assets disposed of under that disposal. |
| |
(7) | In sub-paragraph (6) above “the amount of the ATF assets |
| |
required” means the lesser of— |
| 5 |
(a) | the amount of security required to be provided by the |
| |
member in respect of his underwriting business in the |
| |
member’s last underwriting year, and |
| |
(b) | the amount of security required to be provided by the |
| |
successor company in respect of its underwriting business |
| 10 |
in the successor company’s first underwriting year. |
| |
(8) | This paragraph applies only on the first occasion on or after 6th |
| |
April 2004 on which the member makes an ATF disposal. |
| |
(9) | If a claim made by the member under paragraph 3 above is |
| |
revoked, this paragraph shall apply as if the claim had never been |
| 15 |
| |
Interpretation of this Part of this Schedule |
| |
5 (1) | In this Part of this Schedule— |
| |
| “control” shall be construed in accordance with section 416 |
| |
| 20 |
| “ordinary share capital” has the meaning given by section |
| |
832(1) of the Taxes Act 1988; |
| |
| “successor company” means a corporate member (within |
| |
the meaning of Chapter 5 of Part 4 of the Finance Act |
| |
1994) which is a successor member; |
| 25 |
| “the member’s last underwriting year” has the meaning |
| |
given by paragraph 1(7) above; |
| |
| “the successor company’s first underwriting year” has the |
| |
meaning given by paragraph 1(6) above; |
| |
| “the syndicate capacity disposal” has the meaning given by |
| 30 |
| |
| “underwriting business”, in relation to a successor |
| |
company, has the same meaning as in Chapter 5 of Part 4 |
| |
| |
(2) | For the purposes of this Part of this Schedule, shares comprised in |
| 35 |
any letter of allotment or similar instrument shall be treated as |
| |
| |
(a) | the right to the shares conferred by it remains provisional |
| |
| |
(b) | there has been no acceptance. |
| 40 |
(3) | Paragraphs 3 and 4 above (and paragraph 1 above so far as |
| |
relating to those paragraphs) are to be construed as one with the |
| |
| |
|
| |
|
| |
|
| |
Conversion to underwriting through successor partnerships |
| |
| |
6 (1) | This Part of this Schedule applies if the following conditions are |
| |
| 5 |
| |
(a) | a member gives notice of his resignation from membership |
| |
of Lloyd’s in accordance with the rules or practice of |
| |
| |
(b) | in accordance with such rules or practice, the member does |
| 10 |
not undertake any new insurance business at Lloyd’s after |
| |
the end of the member’s last underwriting year, and |
| |
(c) | the member does not withdraw that notice. |
| |
(3) | Condition 2 is that all of the member’s outstanding syndicate |
| |
capacity is disposed of by the member under a conversion |
| 15 |
arrangement to a successor partnership (“the syndicate capacity |
| |
disposal”) with effect from the beginning of the underwriting year |
| |
next following the member’s last underwriting year. |
| |
(4) | Condition 3 is that the member is the only person who disposes of |
| |
syndicate capacity under a conversion arrangement to the |
| 20 |
| |
(5) | Condition 4 is that the successor partnership starts to carry on its |
| |
underwriting business in the underwriting year next following the |
| |
member’s last underwriting year. |
| |
(6) | In this paragraph “the member’s last underwriting year”, in |
| 25 |
relation to a member who gives notice of his resignation from |
| |
membership of Lloyd’s, means the underwriting year during |
| |
which, or at the end of which, he ceases to be an underwriting |
| |
member and becomes a non-underwriting member in accordance |
| |
with the rules or practice of Lloyd’s. |
| 30 |
(7) | In this paragraph “outstanding syndicate capacity”, in relation to |
| |
a member, means the syndicate capacity of the member other than |
| |
| |
(a) | the member disposes of to a person other than a successor |
| |
member at or before the end of the member’s last |
| 35 |
| |
(b) | ceases to exist with effect from the end of that year. |
| |
Income tax: carry forward of loss relief following conversion |
| |
7 (1) | This paragraph applies if— |
| |
(a) | the member’s total income for a year of assessment |
| 40 |
includes profits of the successor partnership’s |
| |
underwriting business, and |
| |
(b) | throughout the period beginning with the time of the |
| |
syndicate capacity disposal and ending with the end of |
| |
that year of assessment, the member is beneficially entitled |
| 45 |
to more than 50% of the profits of that business. |
| |
|
| |
|
| |
|
(2) | Section 385 of the Taxes Act 1988 (carry-forward of trading losses |
| |
against subsequent profits) shall have effect, in its application in |
| |
relation to the losses of the old underwriting business, as if the |
| |
profits of the successor partnership’s underwriting business to |
| |
which the member is beneficially entitled for that year were profits |
| 5 |
on which the member was assessed under Schedule D in respect |
| |
of the old underwriting business for that year. |
| |
(3) | In sub-paragraph (2) above “the old underwriting business” |
| |
means the member’s underwriting business carried on otherwise |
| |
than through the successor partnership. |
| 10 |
Interpretation of this Part of this Schedule |
| |
8 | In this Part of this Schedule— |
| |
| “successor partnership” means a limited partnership formed |
| |
under the law of Scotland which is a successor member; |
| |
| “the syndicate capacity disposal” has the meaning given by |
| 15 |
| |
| |
| |
Withdrawal of resignation notice |
| |
9 (1) | This paragraph applies if a member— |
| 20 |
(a) | makes a claim for relief under or by virtue of this Schedule, |
| |
| |
(b) | subsequently withdraws the notice of his resignation from |
| |
| |
(2) | The member must give written notice of such withdrawal to an |
| 25 |
| |
(3) | Such a notice must be given no later than six months from the date |
| |
of the withdrawal of the notice of resignation. |
| |
(4) | All such adjustments shall be made, whether by discharge or |
| |
repayment of tax, the making of assessments or otherwise, as are |
| 30 |
required as a result of the withdrawal of the notice of resignation |
| |
(notwithstanding any limitation on the time within which any |
| |
| |
(5) | If a member fails, fraudulently or negligently, to comply with sub- |
| |
paragraphs (2) and (3) above, section 95 of the Taxes Management |
| 35 |
Act 1970 shall apply to him as if he had fraudulently or negligently |
| |
made an incorrect return, statement or declaration in connection |
| |
with the claim for relief made by him under or by virtue of this |
| |
| |
(6) | In this paragraph “tax” means income tax, capital gains tax or |
| 40 |
| |
Interpretation of this Schedule |
| |
| |
|
| |
|