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General

Changes to Lloyd's rules, both in terms of participation through a Limited Liability Vehicle, and a requirement for members to be UK tax resident, occasion the need for special provisions for conversion to a company.

Rules were introduced to facilitate conversion and mitigate the impact for capital gains as outlined below¹. See E5.625B for loss relief provisions.

Background

With the introduction of Limited Liability Vehicles to Lloyd's from 1994, there has been a need for rules to deal with the tax consequences of conversion from trading as an individual Name to trading as a corporate member. Conversion may be to a sole director 'Nameco' company, though other arrangements are possible². The rules have expanded to cover conversion to a partnership, and from a partnership to a company³. There have been reactive changes to some of the rules to accommodate new practices.

For example, changes to the rules of Lloyd's from 1 January 2015 require all underwriters to be UK-resident⁴.

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