The Lloyd’s Underwriters (Double Taxation Relief) (Corporate Members) Regulations 2006

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations make provision for double taxation relief in respect of the profits or losses arising from the underwriting business carried on by a corporate member of Lloyd’s.

Regulations 1 and 2 deal with preliminary matters. Regulation 1 provides for citation, commencement and effect, and regulation 2 for interpretation.

Regulations 3 and 4 deal with general matters. Regulation 3 contains general provisions, and states the principle that relief from United Kingdom corporation tax shall be given under Chapters 1 and 2 of Part 18 of the Income and Corporation Taxes Act 1988 (c. 1) in respect of the foreign tax payable by allowing the amount of the pool of adjusted sums of foreign tax for an accounting period as a credit against the United Kingdom corporation tax payable on the profits arising from the corporate member’s underwriting business. Regulation 4 provides for certain sections of Chapter 2 of Part 18 of the Income and Corporation Taxes Act 1988 to apply for the purposes of these Regulations.

Regulations 5 to 10 apply to determine how the amount of the pool of adjusted sums of foreign tax for an accounting period is ascertained. Regulation 5 provides that the amount of the pool of adjusted sums of foreign tax for an accounting period is calculated by reference to the foreign tax payable for the corresponding foreign period of accounting; and that an accounting period corresponds to a foreign period of accounting if the foreign period of accounting ends in the period of twelve months immediately preceding the beginning of the accounting period. An amount of foreign tax payable for a corresponding foreign period of accounting is called a foreign amount of tax. Regulation 6 contains further provisions that apply if an accounting period or a foreign period of accounting is not a period of twelve months. Regulation 7 provides for foreign amounts of tax to be adjusted in certain circumstances to determine the adjusted sums of foreign tax. Regulation 8 sets out how the calculation of the amount of the pool of adjusted sums of foreign tax is made. Regulation 9 contains transitional provisions; and regulation 10 contains provisions that apply if there is a refund of foreign tax.

Regulation 11 explains how the amount of the pool of adjusted sums of foreign tax for an accounting period is allowed as a credit against the United Kingdom corporation tax payable on the profits arising from the corporate member’s underwriting business.

A full regulatory impact assessment has not been produced for this instrument as no impact on the private or voluntary sectors is foreseen.