LLM3000 - Reinsurance to close (RITC), technical provisions and equalisation reserves: introduction
Reinsurance to close and technical provisions
GIM Chapter 6 (see LLM10000) addresses the special tax issues that relate to technical provisions of general insurance companies. Similar issues arise in relation to reinsurance to close (‘RITC’) and, for open syndicates, technical provisions for Lloyd’s syndicate members. GIM6080 explains the background to the introduction of FA00/S107 and the General Insurance Reserves (Tax) Regulations 2001, SI2001/1757. This legislation applied specific and complex tax rules to the taxation of technical provisions of a general insurer, including Lloyd’s underwriting members. These rules are described at GIM6150 to GIM6340 and the corresponding rules and adaptations for Lloyd’s members are at LLM3010 to LLM3200 in this Chapter.
LLM3210 explains a special rule that applied to RITC before the introduction of FA00/S107.
GIM6510+ explains the rules for general insurance companies following the repeal of FA00/S107 by FA07/SCH11. The corresponding rules and adaptations for Lloyd’s syndicates are at LLM3300 to 3330 below.
Equalisation reserves
FA09/S47 empowers the Treasury to make regulations extending existing equalisation relief, given to general insurance companies for the equalisation reserves they are required by the Financial services Authority to establish, so that it may also benefit corporate and partnership members of Lloyd’s who choose to establish ‘equivalent Lloyd’s reserves’. The effect of these regulations, The Lloyd’s Underwriters (Equalisation Reserves) (Tax) Regulations 2009, SI2009/2039, is described at LLM3400+. Equalisation reserves recognise the volatile and fluctuating results associated with certain general insurance business classes.
Section 107 FA2000: application to Lloyd's members: general |
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Section 107 FA2000: application to Lloyd's members: the 4% rule |
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Section 107 FA2000: application to Lloyd's members: periods affected |
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Section 107 FA2000: adaptations for Lloyd's members: meaning of technical provisions |
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Section 107 FA2000: adaptations for Lloyd's members: changes in a member’s share of a syndicate’s business |
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Section 107 FA2000: adaptations for Lloyd's members: changes in a member’s share of a syndicate’s business: examples |
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Section 107 FA2000: adaptations for Lloyd's members: the declarations basis and the 'one-year later' rule |
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Section 107 FA2000: adaptations for Lloyd's members (page 1 of 3): regulation 7(1) to (3) of the GI reserves tax Regulations |
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Section 107 FA2000: adaptations for Lloyd's members (page 2 of 3): regulation 7(4) and (5) of the GI reserves tax regulations |
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Section 107 FA2000: adaptations for Lloyd's members (page 3 of 3): regulation 7(6) to (11) of the GI reserves tax regulations |
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Section 107 FA2000: particular difficulties |
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Section 107 FA2000: further help available: the 'Lloyd's Calculator' |
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Section 107 FA2000: example: member increases their share of a syndicate’s business (page 1 of 4) |
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Section 107 FA2000: example: member increases their share of a syndicate’s business (page 2 of 4) |
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Section 107 FA2000: example member increases their share of a syndicate’s business (page 3 of 4) |
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Section 107 FA2000: example member increases their share of a syndicate’s business (page 4 of 4) |
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Section 107 FA2000: example: member reduces their share of a syndicate’s business (page 1 of 4) |
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Section 107 FA2000: example: member reduces their share of a syndicate’s business (page 2 of 4) |
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Section 107 FA2000: example: member reduces their share of a syndicate’s business (page 3 of 4) |
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Section 107 FA2000: example: member reduces their share of a syndicate’s business (page 4 of 4) |
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Taxation prior to section 107 FA 2000 |
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Taxation following repeal of section 107 FA2000: the appropriate amount: adaptations for Lloyd’s members |
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Taxation following repeal of section 107 FA 2000: the appropriate amount: adaptations of FA07/SCH11 |
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Taxation following repeal of section 107 FA 2000: appropriate amount Regulations SI2009/1926: application to members of Lloyd’s syndicates |
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Taxation following repeal of section 107 FA 2000: the appropriate amount: application to Lloyd’s syndicates: amendment of the administrative regulations for enforcement purposes |
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Equalisation reserves for corporate and partnership members: background |
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Equalisation reserves for corporate and partnership members: scope of relief |
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Equalisation reserves for corporate and partnership members: equivalent Lloyd’s reserve |
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Equalisation reserves for corporate and partnership members: application of the section 444BA ICTA rules |
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Equalisation reserves for corporate and partnership members: election not to take a tax deduction |
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Equalisation reserves for corporate and partnership members: cessations |
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Equalisation reserves for corporate and partnership members: anti-avoidance |
