LLM6230 - Conversion: Schedule 20A FA93: supplementary provisions

Withdrawal of resignation

One of the conditions for the reliefs is that the Name must give notice of resignation. Under Lloyd’s rules, a Name may withdraw that notice of resignation, and in theory that withdrawal could be outside normal assessment time limits, in which case HMRC would be unable to withdraw any relief which had been claimed under Schedule 20A.

FA93/SCH20A/PARA9 requires the Name to give written notice of the withdrawal, within six months. Any relief claimed can be withdrawn, regardless of normal time limits for assessing. If a member fraudulently or negligently fails to comply with this requirement, the incorrect return provisions of TMA70/S95 will apply.

Interpretation

FA93/SCH20A/PARA5 contains interpretation of terms used in Part 1. This ensures that words and phrases such as ’control’, ’ordinary share capital’ and others are interpreted in accordance with ITA 07, ICTA88, TCGA92 and the Lloyd’s legislation in FA94.

FA93/SCH20A/PARA8 contains interpretation of terms used in Part 2. ’Successor partnership’ is defined as a Scottish limited partnership, and from 14 February 2006 a Limited Liability Partnership.

FA93/SCH20A/PARA10 contains interpretation of the terms ’conversion arrangement’, ’successor member’ and ’syndicate capacity’. These terms follow the normal meaning within Lloyd’s.

Commencement

FA93/SCH20A/PARA11 sets out the commencement dates for the Schedule 20A reliefs. The reliefs for the carry forward of trading losses in both Nameco conversions and SLP/LLP conversions, and the roll-over relief for transfers of syndicate capacity, apply to conversions on or after 6 April 2004. In effect the new reliefs will be available where the conversion vehicle’s first underwriting year is the 2005 year of account.

The roll-over relief for transfers of ATF assets applies to transfers of ATF assets on or after 6 April 2004, even if the transfer of syndicate capacity took place before that date. So roll-over relief will be due for ATF asset transfers to existing Namecos, which started underwriting on years of account before 2005, provided all the other conditions for relief are met.