Income and Corporation Taxes Act 1988

24 The following section shall be inserted after section 142—

“142A Disposal of assets in premiums trust fund etc

(1) Subject to subsection (4) below, for the year 1972-73 and subsequent years of assessment the chargeable gains or allowable losses accruing on the disposal of assets forming part of a premiums trust fund shall be taken to be those allocated to the corresponding underwriting year.

(2) The amount of the gains or losses so allocated at the end of any accounting period shall be such proportion of the difference mentioned in subsection (3) below as is allocated to the underwriting year under the rules or practice of Lloyd's.

(3) That difference is the difference between the valuations at the beginning and at the end of the accounting period of the assets forming part of the fund, the value at the beginning of the period of assets acquired during the period being taken as the cost of acquisition and the value at the end of the period of assets disposed of during the period being taken as the consideration for the disposal.

(4) Subsections (1) to (3) above do not apply to the computation of chargeable gains or allowable losses on the disposal of gilt-edged securities as defined in Schedule 2 to this Act or of qualifying corporate bonds as defined in section 64 of the Finance Act 1984.

(5) The Board may, by regulations made by statutory instrument which shall be subject to annulment in pursuance of a resolution of the House of Commons, provide—

(a) for the assessment and collection of tax charged in accordance with this section;

(b) for modifying the provisions of this section in relation to syndicates continuing for more than two years after the end of an underwriting year;

(c) for giving relief from capital gains tax in cases of an underwriter dying while carrying on his business, and

(d) for giving credit for foreign tax.”