Regulation 8 Cessation of underwriting business — modifications of Part I of Schedule 20

Paragraph 11 of Schedule 20^f1 (tax consequences of cessation) shall apply with the modifications specified in paragraphs (2) to (5) below.

In sub–paragraph (5) in the definition of “the penultimate underwriting year” for the words from “immediately preceding” to the end there shall be substituted the words “corresponding to the year of assessment immediately preceding the member’s final year of assessment;”.

In sub–paragraph (5) for the definition of “the relevant underwriting year” there shall be substituted the following definition—

• ““the relevant underwriting year” means—

  1. (a)

     where a member dies before the occurrence of any of the events specified in sub–paragraph (6) below, the underwriting year immediately preceding that corresponding to the relevant year of assessment; and

  2. (b)

     in any other case, the underwriting year corresponding to the year of assessment immediately preceding the member’s final year of assessment.”.

In sub–paragraph (5) for paragraph (a) of the definition of “the relevant year of assessment” there shall be substituted the following paragraph—

“(a)

where a member dies before the occurrence of any of the events specified in sub–paragraph (6) below, the year of assessment at the end of which he is treated, by virtue of section 179A(2) of this Act^f2, as having died;”.

After sub–paragraph (5) there shall be added the following sub–paragraphs—

“(6)

For the purposes of the definitions of “the relevant underwriting year” and “the relevant year of assessment” in sub–paragraph (5) above the events specified before the occurrence of which a member dies are the following—

(a)

the member’s deposit at Lloyd’s is paid over to him or his assigns, or to a person other than the member or his assigns;

(b)

the member or another person is released from any arrangement entered into by the member or that person in order to satisfy the requirement on the part of the member to provide a deposit at Lloyd's;

(c)

the last open year of account of any syndicate of which he was a member is closed.

(7)

For the purposes of sub–paragraph (6)(c) above, the last open year of account of any syndicate of which a person was a member shall be regarded as having closed either—

(a)

when the member is treated under the rules or practice of Lloyd’s as having been discharged of all his liabilities in relation to that syndicate, whether by the syndicate closing its accounts or by the member or his personal representatives or assigns entering into a quota share contract, or

(b)

in a case where the member entered, or his personal representatives or assigns have entered, into a quota share contract before the end of the closing year of the syndicate, at the end of the underwriting year in which the contract was made.”.

This regulation shall have effect for the year 1994—95 and subsequent years of assessment.