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Finance Act 2007

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This is the original version (as it was originally enacted).

33Lloyd’s corporate members: restriction of group relief

(1)In FA 1994, after section 227 insert—

227ARestriction of group relief

(1)Losses of the last active underwriting year of a corporate member are not eligible for surrender by the corporate member as group relief to another company unless the group-relief continuity condition is satisfied.

(2)In this section “last active underwriting year”, in relation to a corporate member, means—

(a)if the corporate member writes insurance business in only one underwriting year, that underwriting year, and

(b)otherwise, the last underwriting year in which the corporate member writes insurance business.

(3)Where in an underwriting year—

(a)the corporate member writes an amount of insurance business which is insignificant when compared with that written by it in the preceding underwriting year, or

(b)the only insurance business written by the corporate member consists of the acceptance of reinsurance to close premiums,

the underwriting year is not to be regarded for the purposes of subsection (2)(b) above as an underwriting year in which the corporate member writes insurance business.

(4)In subsection (3)(b) above “reinsurance to close premium” means a premium or other consideration under a contract in pursuance of which, in accordance with the rules or practice of Lloyd's, one underwriting member agrees with another to meet liabilities arising from the latter’s underwriting business in an underwriting year so that the accounts of the business for that year may be closed.

(5)The group-relief continuity condition is satisfied if the corporate member (as the surrendering company) and the other company (as the claimant company) meet the conditions in section 402(2) or (3) of the Taxes Act 1988 throughout the period—

(a)beginning with the last day of the last active underwriting year of the corporate member, and

(b)ending with the first day of the first underwriting year in which losses of the last active underwriting year are declared.

(2)The amendment made by subsection (1) has effect in relation to any case where the corporate member (as the surrendering company) and the other company (as the claimant company) first meet the conditions in section 402(2) or (3) of ICTA on or after 21st March 2007.

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