(This note is not part of the Regulations)
Schedule 20A of the Finance Act 1993 (“FA 1993”) makes provision for certain reliefs to be available to: individual members of Lloyd’s who convert to limited liability underwriting, whether by converting to underwriting through Lloyd’s partnerships (which may be either limited liability partnerships or limited partnerships formed under the law of Scotland) or by converting to underwriting through successor companies; and to individual partners in Lloyd’s partnerships which convert to underwriting through successor companies.
Schedule 20A is intended to make relief from capital gains tax potentially available to individual members who convert to underwriting through successor companies and to individual partners of Lloyd’s partnerships which convert to underwriting through successor companies in two circumstances. The first is where the individual receives shares in the successor company in return for the individual’s interest in the syndicate capacity that passes to the successor company. The second is where there is a disposal to the successor company of some or all of the assets forming the individual’s, or the Lloyd’s partnership’s, ancillary trust fund. Relief is available where the individual receives shares in the successor company as consideration for the disposal of the assets and certain other conditions are also satisfied.
Changes to the rules of Lloyd’s have been made which, unless Schedule 20A is amended, will have the effect that where there is a disposal to the successor company of ancillary trust fund assets the individual who is interested in the assets will potentially be entitled to less relief than if the changes had not been made.
The Commissioners for Her Majesty’s Revenue and Customs consider it expedient to make changes to FA 1993 to ensure, so far as is possible, that individuals will be entitled to the same amount of relief in relation to disposals to successor companies of ancillary trust fund assets as would have been available had the rules of Lloyd’s remained unchanged. These Regulations amend FA 1993 accordingly.
A Tax Information and Impact Note covering this instrument will be published on the HMRC website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.