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Syndicate capacity refers to the level of premiums (net of reinsurance) which may be underwritten by each syndicate. Syndicate capacity is the sum of the limits oif each member of the syndicate.

The member's capacity, or overall premium limit, is related to the capital they have at risk. In order to do business at Lloyd's a member must acquire capacity¹.

A special process enables syndicate capacity to be sold and purchased. A member is permitted to realise all or part of their rights in any particular syndicate (their syndicate capacity) either by offering them for sale at one of the periodical syndicate capacity auctions, or by entering into a bilateral agreement with a purchaser. Each member's right to participate in a particular syndicate is therefore a marketable asset.

A gain arising on the disposal of syndicate capacity is a chargeable capital gain.

In the case of corporate Lloyd's members, gains are dealt with under the intangible assets regime (see D1.603, D1.641) and are not within the charge to corporation tax on