Finance Act 1994

Main provisions U.K.

219 Taxation of profits. U.K.

(1) Corporation tax for any accounting period on the profits arising from a corporate member’s underwriting business shall be computed on the profits of that accounting period.

(2) As respects the profits arising to a corporate member for any accounting period directly from its membership of one or more syndicates, or from assets forming part of a [F1 premium] trust fund—

(a) the aggregate of those profits shall be computed for tax purposes under Case I of Schedule D; and

(b) accordingly, no part of those profits shall be computed for those purposes under any other Schedule or any other Case of Schedule D.

(3) [F2 Subject to subsection (4A) below,] the profits arising to a corporate member for any accounting period—

(a) from assets forming part of an ancillary trust fund; or

(b) from assets employed by it in, or in connection with, its underwriting business,

shall be computed for tax purposes under Case I of Schedule D if, and to the extent that, they do not fall to be computed for those purposes under any other Schedule or any other Case of Schedule D.

(4) Where the profits arising for any accounting period from the assets of a corporate member’s [F1 premium] trust fund include [F3 UK distributions], subsection (2) above shall apply in relation to those distributions F4 . . . notwithstanding anything in section 11(2)(a) or 208 of the Taxes Act 1988.

[F5 (4A) Notwithstanding anything in section F6 ... 208 of the Taxes Act 1988, UK distributions in respect of any assets of a corporate member which are mentioned in paragraph (a) or (b) of subsection (3) above—

(a) shall be taken into account in computing profits of the corporate member for tax purposes; and

(b) shall be so taken into account under Case I of Schedule D (and not under any other Schedule or any other Case of Schedule D).

(4B) Section 231(1) of the Taxes Act 1988 (entitlement to tax credit) shall not apply where the distribution there mentioned is a distribution in respect of any asset of a corporate member’s [F1 premium] trust fund.

(4C) In this section “UK distributions” means dividends or other distributions of a company resident in the United Kingdom.]

(5) In section 20(2) of the Taxes Act 1988 (Schedule F), after the words “section 171 of the Finance Act 1993” there shall be inserted the words “ or section 219 of the Finance Act 1994 ”.

Textual Amendments

F1 Words in s. 219(2)(4)(4B) substituted (1.12.2001) by S.I. 2001/3629, art. 87(a)

F2 Words in s. 219(3) inserted (31.7.1997 with effect as mentioned in s. 22(7) of the amending Act) by 1997 c. 58, s. 22(2)

F3 Words in s. 219(4) substituted (31.7.1997 with effect as mentioned in s. 22(7) of the amending Act) by 1997 c. 58, s. 22(3)(a)

F4 Words in s. 219(4) repealed (31.7.1997 with effect as mentioned in s. 22(7) and the Note to Sch. 8 Pt. II(5) of the repealing Act) by 1997 c. 58, ss. 22(3)(b), 52, Sch. 8 Pt. II(5)

F5 S. 219(4A)-(4C) inserted (31.7.1997 with effect as mentioned in s. 22(7) of the amending Act) by 1997 c. 58, s. 22(4)

F6 Words in s. 219(4A) repealed (10.7.2003) (with effect in accordance with Sch. 43 Pt. 3(6) Note of the amending Act) by Finance Act 2003 (c. 14), Sch. 43 Pt. 3(6)

220 Accounting period in which certain profits or losses arise. U.K.

(1) For the purposes of section 219 above and all other purposes of the Corporation Tax Acts, the profits or losses arising to a corporate member in any accounting period directly from its membership of one or more syndicates, or from assets forming part of a [F7 premium] trust fund, shall be taken to be—

(a) if two underwriting years each fall partly within that period, the aggregate of the apportioned parts of those profits or losses in those years; and

(b) if a single underwriting year falls wholly or partly within that period, those profits or losses or (as the case may be) the apportioned part of those profits or losses in that year.

(2) Subject to the provisions of this Chapter, for the purposes of subsection (1) above and all other purposes of the Corporation Tax Acts—

(a) the profits or losses arising to a corporate member in any underwriting year directly from its membership of one or more syndicates shall be taken to be those of any previous year or years which are declared in that year; and

(b) the profits or losses arising to a corporate member in any underwriting year from assets forming part of a [F7 premium] trust fund shall be taken to be those allocated under the rules or practice of Lloyd’s to any previous year or years the profits or losses of which are declared in that year.

(3) In this section “apportioned part”, in relation to the profits or losses of an underwriting year, means a part apportioned under section 72 of the Taxes Act 1988.

Textual Amendments

F7 Words in s. 220(1)(2)(b) substituted (1.12.2001) by S.I. 2001/3629, art. 87(b)

221 Assessment and collection of tax. U.K.

(1) Subject to subsection (2) below, Schedule 19 (Lloyd’s underwriters: assessment and collection of tax) to the M1 Finance Act 1993 (“the 1993 Act”) shall apply in relation to corporate members as it applies in relation to other members.

(2) In its application to a corporate member, paragraph 13 of that Schedule shall have effect as if—

(a) in sub-paragraph (3)(b), the reference to the members’ agent of each member were a reference to each corporate member itself;

F8 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) in sub-paragraph (4), the reference to section 824 of the Taxes Act 1988 were a reference to section 826 of that Act (interest on tax overpaid); F9 . . .

F9 (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F8 S. 221(2)(b) repealed (31.7.1997 with effect as mentioned in the Note to Sch. 8 Pt. II(5) of the repealing Act) by 1997 c. 58, s. 52, Sch. 8 Pt. II(5)

F9 S. 221(2)(d) and the preceding word “and ” repealed (31.7.1997 with effect as mentioned in the Note to Sch. 8 Pt. II(5) of the repealing Act) by 1997 c. 58, s. 52, Sch. 8 Pt. II(5)

Marginal Citations

M1 1993 c.34.