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The Lloyd鈥檚 SA tax return

To simplify working out the amount of foreign tax in the Lloyd鈥檚 foreign tax pool,a special section (Part 4) of the Lloyd鈥檚 Pages of the SA return brings together allthe elements of foreign tax suffered on Lloyd鈥檚 income for the year. By following theinstructions for completing that section, the entry at 3L.78 (or 1L.78 for Trust andEstate Returns) gives the total amount in the foreign tax pool for the year. To claimrelief for this pool of Lloyd鈥檚 foreign tax against UK tax (i.e. tax credit relief),Names complete the Foreign Pages of the SA return.

Where relief is claimed by deduction, this is done by including the total amount of theLloyd鈥檚 foreign tax pool as a deduction from the trading results for the year. TheLloyd鈥檚 SA Pages have special boxes to allow Names to claim DTR by deduction. In the2005-06 Lloyd鈥檚 Pages these boxes are at 3L.90, where the result before deduction offoreign tax is a profit, and 3L.83 where the result before deduction of foreign tax is aloss.

Tax credit relief: the SA Foreign Pages

The self assessment Foreign Pages require the taxpayer to work out the UK tax onprofits arising on a country by country basis. This is incompatible with the pooling basiswhich operates for Lloyd鈥檚 foreign tax. Instead, Names are asked to make claims fortax credit relief for the Lloyd鈥檚 foreign tax pool as below

• Column A - enter Lloyd鈥檚 instead of the name of the foreign country where the income arose
• Column D - enter the total amount in sterling of foreign tax paid on Lloyd鈥檚 income, using the exchange rate prevailing at the date the income was received to translate the foreign tax to sterling
• Column E - enter the total profits from membership of Lloyd鈥檚.

The Lloyd鈥檚 pool of foreign tax is then included in the total foreign tax for theyear (in box 6.9) and then the standard procedures can be followed to complete the claim,bearing in mind that for tax credit relief purposes, the total profit from Lloyd鈥檚(box 3L.91) is regarded as one item of income and foreign tax paid on Lloyd鈥檚 incomeis regarded as foreign tax on that item of income.

Foreign Pages Working Sheet

Names who have a choice over claiming relief by deduction or as tax credit relief mayseek help in completing the Working Sheet in the Foreign Pages. The amount of foreign taxto include is the total amount of the Lloyd鈥檚 foreign tax pool for the year (box3L.78 in the 2005- 06 Lloyd鈥檚 Pages), with no apportionment between different sourcesof foreign tax on Lloyd鈥檚 income. If the Foreign Pages are completed to claim taxcredit relief for foreign tax on Lloyd鈥檚 income, there should be no entries (or onlyzeroes) in boxes 3L.83 and 3L.90 (these boxes allow Names to claim relief for foreign taxby deduction).