LLM5060 - Names: income from ancillary trust funds (‘ATFs’): introduction
Income from ancillary trust funds (ATFs, part of Funds at
Lloyd’s, see
LLM1200) is taxable in the corresponding
underwriting year in which it is received – FA93/S172 (1)(c)
(
LLM5290).
For instance, on 28 February 2006, a Name receives a dividend
of £900 (with a tax credit of £100) from shares held in
an ATF. In the 2006-07 Lloyd’s pages of his SA Return, the
Name will include £1,000 in Part 1 (income from Funds at
Lloyd’s). This amount is then added in to the Case I
Lloyd’s trading profits for 2006-07. The tax credit of
£100 is included in the total amount of tax already paid for
2006-07 and is set off against the tax due from the Name on Lloyd's
Case I income for 2006-07 (although it cannot be repaid).
If Lloyd's trade income is insufficient to set off the entire
£100, the tax credit cannot be set off against other income.
The Name should not show the dividend or the tax credit separately
in any other part of the Tax Return.
To compute the amount of income arising on the asset, the
computational rules applicable to that type of income are used, but
by reference to the calendar year that ends in the tax year, rather
than the tax year itself.
