Finance Act 2007 (c. 11)

Part 3 U.K. Income tax, corporation tax and capital gains tax

Insurance and friendly societies U.K.

43 Lloyd's: cessation of business by corporate members U.K.

(1) In FA 1994, after section 227A (inserted by section 33) insert—

“227B Transfer of underwriting business without change of ownership

(1) This section applies where, in accordance with the rules or practice of Lloyd's, a corporate member (“the successor”) has taken up the syndicate capacity of another corporate member (“the predecessor”).

(2) Section 343 of the Taxes Act 1988 (company reconstructions without a change of ownership) applies as if—

(a) the trade mentioned in that section were the underwriting business of the predecessor,

(b) the predecessor ceases to carry it on, and the successor begins to carry it on, at the end of the first underwriting year in which profits or losses of the predecessor's last active underwriting year are declared, and

(c) subsections (8) to (10) and (12) were omitted.

(3) For the purposes of subsection (1) above the successor has taken up the predecessor's syndicate capacity if it has taken up the rights to participate in syndicates which were (or otherwise would be) offered to the predecessor.

(4) In subsection (2)(b) above “last active underwriting year” has the same meaning as in section 227A above (see subsections (2) to (4) of that section).”

(2) The amendment made by subsection (1) has effect in any case where the first underwriting year in which profits or losses of the predecessor's final underwriting year are declared is 2007 or a later underwriting year.