LLM2130 - Syndicate accounts: taxation: premium trust fund assets: investment income

Investment income

Investment income received by the syndicate is taxed as trading income irrespective of its nature. For individual members, this is by virtue of FA93/S171 and for corporate members FA94/S219.

Contrast the position for general insurers. See the General Insurance Manual (GIM5000+).

Dividends

Entitlement to tax credits on equities held in a premium trust fund was withdrawn in respect of distributions made on or after 2 July 1997 by FA93/S171 (2B) for individual members and by FA94/S219 (4B) for corporate members.

The charge on dividends paid from that date is on the dividend amount.

Where dividends were paid before 2 July 1997 on PTF assets, the charge was on the dividend plus the associated tax credit. Tax credits were repayable to the syndicate managing agent under FA93/SCH19/PARA13 (1)(b).