Adapted rules on successions (meaning transfers of business
remaining under common control) apply where one corporate member
(the successor) has taken up the syndicate capacity of another
corporate member (the predecessor). The usual rules under
ICTA88/S343 (CTM06060 – see
LLM10000) are applied
as if
The focus is on declaration year linked with the last active
underwriting year because that is the period for which the results
are recognised for tax purposes (
LLM4060). The reference to ‘first
declaration year’ recognises that the syndicate might go into
run-off, when results for the active underwriting year would be
declared more than once (
LLM2070). Last active underwriting year
has the meaning given in FA94/S227A, which fixes the year by
reference to the one in which the last significant underwriting
activities take place, ignoring any later year in which activities
insignificant by comparison may occur.
The legislation looks to whether a succession has
constructively taken place with substantially all the activities
being transferred from one company to another under common control.
It is not necessary to investigate whether every last unit of
syndicate capacity of the predecessor features with the successor.
This provision, within FA94/S227B, applies where the
predecessor’s last active underwriting year, as defined
above, is 2007 or later. Previously, groups could sometimes get the
effective benefit of the relief on transferring losses within a
group under common control by tactical use of the disclaimer
provision in FA00/S107 (4). This ability was withdrawn, subject to
a transitional provision, by FA07/S42 and FA07/SCH11/PARA4.
