LLM5440 - Names: non-resident members
The Centre for Non-Residents is responsible for dealing with the tax affairs of all non-resident individual Names. The trade of acting as an underwriting member of Lloyd鈥檚 is carried on wholly in the UK (in the Lloyd鈥檚 Building). This trade is carried on through a branch or agency, or permanent establishment. As such, non-resident Names are chargeable to income tax as trade profits on the full amount of profits from that trade, even though much of the underwriting business may be overseas insurance.
Income from Funds at Lloyd鈥檚
Income from Funds at Lloyd鈥檚 wherever the assets in the funds are situated is explicitly included as part of the trade profits (FA93/S184 (2)(b)), whether paid under deduction of UK tax or not.
Gains on disposals of ancillary trust fund (ATF) assets
Since the assets in a Name鈥檚 ATFs are used for the purposes of a trade carried on in the UK through a branch or agency (underwriting as a member of Lloyd鈥檚), Names are liable to CGT on the disposal of ATF assets which are situated in the UK.
Deemed disposals of ATF assets at cessation of trading
When non-resident Names cease to underwrite, normally when the Lloyd鈥檚 Deposit is released, they are deemed to dispose of their ATF assets and immediately reacquire them at market value (TCGA92/S25 (3)). Any consequential gains will be chargeable to CGT.
ATF assets: accrued income securities
Although the computational rules of the Accrued Income Scheme are used to work out the amount of income or expense that arises when a Name purchases or sells such securities, the resulting amount is included in trading results for resident and non-resident Names alike. The only exceptions for non-residents are for foreign securities and FOTRAs.
FOTRAs
There is no exemption from tax on the interest arising on FOTRA (free of tax to residents abroad) gilts that are held as part of a non-resident Name鈥檚 Funds at Lloyd鈥檚. The income arising on gilts is included in trading profits.
Changes in value, and gains, of FOTRAs held in premium trust funds are disregarded for UK tax purposes for certain non-resident Names, by virtue of FA93\S154 (2). These amounts are known as 鈥楨xempt鈥� (or sometimes 鈥楨xempt B鈥�) income. The disregarded amount can be positive or negative and is deducted from or added to the trade profits of Names who are not ordinarily resident (NOR) and non-UK domiciled.
鈥極wn country tax鈥�
When DTR is given by credit relief (LLM7020), it is not possible for any overseas residents, whether in the EEA or elsewhere, to be given relief for tax paid in the State where the overseas resident lives. For example, US Names cannot be given credit relief for US tax. Lloyd鈥檚 supply an analysis of overseas tax with the forms CTA1, and this analysis can be used to verify that credit relief has not been claimed for 鈥榦wn country鈥� tax.
Non UK taxation advices
Lloyd鈥檚 Members Services provides special taxation advices for Names in USA, Canada, Ireland and Australia, to assist them in calculating liability in their own tax jurisdiction.