U.K. Budget Boosts Lloyd’s Names

March 18, 2004

Chancellor Gordon Brown’s 2004 U.K. budget proposals will help schools with extra cash and retired persons with tax breaks, but not civil servants, as the budget plans on cutting some 40,000 jobs.

While the U.K. will have to borrow an estimated £37 billion ($66 billion) this year, there was still some room in the budget to give Lloyd’s individual “Names” a tax break. It proposes to change revenue code regulations, which currently prohibit names who form a limited liability company from carrying forward capital gains and losses. Under the new rules those remaining individual names could do so.

While Lloyd’s now has far fewer individual names, around 12 percent, compared to its corporate capital providers, it welcomed the news. Reuters reported that Lloyd’s Chairman Peter Levene said: “The changes to the tax rules will remove one of the last barriers to individual Lloyd’s members converting to limited liability underwriting.”

In other comments on the budget the Association of British Insurers (ABI) welcomed the news that the government intends to simplify what it called “the complex and unwieldy tax regime governing pensions.” The ABI was also pleased that the budget did not raise the rate of the Insurance Premium Tax (IPT), which it said has generated “substantial levels of revenue every year.” It called for a reduction of the tax on premiums.

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