The Lloyd’s Underwriters (Special Reserve Funds) (Amendment) Regulations 1995

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Lloyd’s Underwriters (Special Reserve Funds) Regulations 1995 (S.I. 1995/353) (“the principal Regulations”).

Regulation 1 provides for citation and commencement, and regulation 2 contains definitions.

Regulation 3 makes an amendment of a drafting nature to regulation 5 of the principal Regulations.

Regulation 4 substitutes new regulations (7 and 7A) for regulation 7 of the principal Regulations. The substituted regulation 7 extends the meaning of “special reserve fund” in certain provisions of Part I of Schedule 20 to the Finance Act 1993 (“Schedule 20”) so as to include income arising after the death of an underwriting member from assets of his special reserve fund where the income is retained by the trustees and invested (“retained income”), and profits arising from the investment of that income. Regulation 7A modifies paragraph 9 of Schedule 20 (tax exemption for profits arising from assets of special reserve fund) so as to extend the tax exemptions conferred by that paragraph to profits arising after the death of the member from retained income.

Regulation 5 amends regulation 8 of the principal Regulations by further modifying paragraph 11 of Schedule 20 (tax consequences of cessation) so as to extend the charge to tax under that paragraph on payments made to a member out of his special reserve fund to payments of retained income made after the member’s death to his personal representatives.

Regulation 4 (except in its application to paragraph 10 of Schedule 20) and regulation 5 have effect for the year 1994-95 and subsequent years of assessment. Authority for the retrospective effect of these Regulations is given by section 182(4) of the Finance Act 1993.