The Lloyd’s Underwriters (Special Reserve Funds) Regulations 1999

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend and modify Schedule 20 to the Finance Act 1993 (c. 34) (“Schedule 20” and “the Act” respectively). The principal effects of the changes are to make provision in consequence of a variation of the arrangements made by the Council of Lloyd’s for special reserve funds, under section 175(1) of the Act (regulation 3), and to make other modifications to Schedule 20 for cases where a Lloyd’s member ceases to carry on his underwriting business (regulations 4, 5 and 6).

Regulation 1 provides for citation, commencement and effect.

Regulation 2 provides for interpretation.

Regulation 3 amends paragraph 6(2) of Schedule 20, giving additional flexibility to the value comparison to be made under that provision. The end-of-year valuation of the fund is to be compared with 50% of (a) the higher of the member’s overall premium limit for that year or that for the immediately preceding year, or (b) where he did not accept premiums in either of those years, his limit in the last underwriting year in which he did so.

Regulations 4 and 5 make technical modifications to paragraphs 8 and 10 of Schedule 20, for cases of cessation of business.

Regulation 6 modifies paragraph 11 (“paragraph 11”) of Schedule 20 (tax consequences of cessation). Paragraph (2) makes technical modifications to paragraph 11(2). Paragraph (3) provides that interest and surcharges apply from a date later than that given by paragraph 11(2)(a). Paragraph (4) provides for additional adjustments to the calculation of the amount of the trading receipt in accordance with paragraph 11(3). Paragraph (5) provides the Capital Gains Tax acquisition date and cost, for assets which are transferred to the member, his personal representatives or assigns.