'Underwriters

Orders of the Day — Finance Bill – in the House of Commons at 12:30 am on 10th July 1985.

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18A. In paragraphs 18B to 18H below "approved association of underwriters", "business" and "premiums trust fund" have the meanings given by paragraph 16(1) of Schedule 10 to the Taxes Act.

18B. An underwriting member of Lloyd's or of an approved association of underwriters shall be treated for the purposes of this Chapter as absolutely entitled as against the trustees to the securities forming part of his premiums trust fund, his special reserve fund (if any) and any other trust fund required or authorised by the rules of Lloyd's or the association in question, or required by the underwriting agent through whom his business or any part of it is carried on, to he kept in connection with the business.

18C. — (1) In relation to securities forming part of a premiums trust fund, any reference in Schedule 20 to this Act to a date in the first column in sub-paragraph (3) below shall be read as a reference to that opposite it in the second.

(2) Where securities are transferred by or to the trustees of a premiums trust fund, this Chapter (other than Schedule 20) shall be read in relation to the trustees as if any reference to a date in the first column in sub-paragraph (3) below were a reference to that opposite it in the second, but without being so read in relation to the transferee or transferor (unless in turn constituting trustees of such a fund).

(3) The dates are—

28th February 19821st January 1982
27th February 198531st December 1984
28th February 19851st January 1985
27th February 198631st December 1985
28th February 19861st January 1986.

18D.—(1) The securities forming part of a premiums trust fund at the beginning of 1st January 1986 or 1st January of any subsequent year shall be treated for the purposes of this Chapter as transferred on 1st January concerned to the trustees of the fund.

(2) In relation to such a transfer, the settlement day is the day preceding that of the transfer (notwithstanding paragraph 4 above).

(3) The securities shall be treated as transferred with accrued interest if the trustees are entitled to receive in respect of them interest payable on—

  1. (a) the day of the transfer, if that is an interest payment day, or
  2. (b) the next (or first) interest payment day to fall after that day, in any other case,
and they shall be treated as transferred without accrued interest if they are not so entitled.

(4) This paragraph does not apply as regards securities if the day preceding 1st January concerned is an interest payment day in relation to them.

18E.—(1) The securities forming part of a premiums trust fund at the end of 31st December 1986 or 31st December of any subsequent year shall be treated for the purposes of this Chapter as transferred on 31st December concerned by the trustees of the fund.

(2) In relation to such a transfer, the settlement day is the day of the transfer (notwithstanding paragraph 4 above).

(3) The securities shall be treated as transferred with accrued interest if the trustees were entitled to receive in respect of them interest payable on the next (or first) interest payment day to fall after the day of the transfer, and they shall be treated as transferred without accrued interest if they were not so entitled.

(4) This paragraph does not apply as regards securities if 31st December concerned is an interest payment day in relation to them.

18F. — (1) Where securities are transferred by or to the trustees of a premium trust fund, this paragraph shall have effect in relation to the trustees, though not in relation to the transferee or transferor (unless in turn constituting trustees of such a fund).

(2) In this paragraph "straddling period" means a period which would (by virtue of paragraph 3(3) and (4) above and apart from this paragraph) be in relation to the securities an interest period beginning on or before and ending after 31st December 1986 or 31st December of any subsequent year.

(3) For the purposes of this Chapter a straddling period is not an interest period, but the following shall apply to it—

  1. (a) the period beginning with the day on which the straddling period begins and ending with 31.st December concerned is an interest period, and
  2. (b) the period beginning with the day following 31st December concerned and ending with the day with which the straddling period ends is an interest period.

18G. — (1) Paragraph 11 above does not apply where the individual concerned is an underwriting member of Lloyd's or of an approved association of underwriters and the securities concerned form part of a premiums trust fund, a special reserve fund or any other trust fund required or authorised by the rules of Lloyd's or the association in question, or required by the underwriting agent through whom the individual's business or any part of it is carried on, to be kept in connection with the business.

(2) In such a case the deceased's personal representatives shall be treated for the purposes of this Chapter as the transferor or transferee in relation to transfers of securities as to which the deceased was the transferor or transferee (as the case may be) in the interest period in which he died.

18H. — (1) This paragraph applies where an underwriting member of Lloyd's or of an approved association of underwriters is entitled to securities forming part of a premiums trust fund or to different securities forming part of different premiums trust funds.

(2) Where there is one such fund, he shall be treated for the purposes of Schedule 20 to this Act as holding the securities forming part of it as one person and as holding as another person any other securities to which he is entitled.

(3) Where there is more than one such fund, he shall be treated for those purposes as holding the securities forming part of different funds as different persons and as holding as yet another person any other securities (not forming part of such a fund) to which he is entitled.

(4) In relation to the securities forming part of such a fund, four of the references in Schedule 20 to this Act to a person (where they would otherwise be to the member) shall be read as references to the underwriting agent through whom the business to which the fund relates is carried on; and the four references are the reference in paragraph 2(1), the first two in paragraph 6(1) and the first in paragraph 6(2).

(5) Where an underwriting member of Lloyd's or of an approved association of underwriters is entitled to securities forming part of a premiums trust fund, and different securities are attributable to his participation in different syndicates, the securities attributable to different syndicates shall be treated for the purposes of this paragraph as forming part of different premiums trust funds.

18I. In paragraph 7(3)(a) of Schedule 10 to the Taxes Act (special reserve funds) "income" includes annual profits or gains chargeable to tax by virtue of section 71(2) of this Act or paragraph 2(4) of Schedule 20 to this Act or paragraph 13(3) above.'.

No. 103, in page 189, line 38, at end insert—

'23A. — (1) In this paragraph "conversion" means conversion within the meaning of section 82 of the Capital Gains Tax Act 1979, and "exchange" means an exchange which by virtue of Chapter II of Part IV of that Act (reorganisation etc.) does not involve a disposal.

(2) Where on a conversion or exchange of securities a person is treated as entitled to a sum under section 70(2)(a) of this Act, an amount equal to the accrued amount (determined under that section) shall, for capital gains tax purposes, be treated as follows—

  1. (a) to the extent that it does not exceed the amount of any consideration which the person receives (or is deemed to receive) or becomes entitled to receive on the conversion or exchange (other than his new holding), it shall be treated as reducing that consideration, and
  2. (b) to the extent that it does exceed that amount, it shall be treated as consideration which the person gives on the conversion or exchange.

(3) Where on a conversion or exchange of securities a person is treated as entitled to relief under section 70(3)(a) of this Act, an amount equal to the rebate amount (determined under that section) shall, for capital gains tax purposes, be treated as consideration which the person receives on the conversion or exchange.'.— [Mr. Peter Rees.]