LLM8200 - Capital gains: Names: retirement relief

FA98/S140 phased out retirement relief over 5 years. Reductions in the relief due commenced in 1999- 2000, and the relief was reduced in stages. No relief was due from 6 April 2003. See CG63861 (LLM10000) for details of the maximum relief available in each year.

Before 6 April 2003, when a member resigned from Lloyd’s and sold all of their syndicate capacity, subject to meeting the other conditions for relief (having carried on the trade for at least one year, and being aged 50 or over, or retired on ill-health grounds), then relief was available on gains on the disposal of business assets.

Shares and securities and other assets held as investments were specifically excluded from being business assets for retirement relief purposes (TCGA 92/SCH6/PARA12 – a separate kind of retirement relief on disposals of shares or securities in a ‘personal company’ was not relevant to Names). In practice, retirement relief usually only applied to disposals of syndicate capacity.

To satisfy the condition that the business has been carried on for more than 12 months, the determining factor was the length of time that an individual had been an underwriting member of Lloyd’s, and not how long the member had participated on the syndicates in which the capacity was sold.

Retirement relief was also available where there has been a disposal of part of a business. To qualify as a part disposal of the business, it was not sufficient merely to sell off some of the assets of the business, nor to reduce the overall level of business activity: there had to be a clear disposal of an identifiable part of the business.

Reducing the amount of business written, or the number of syndicate participations, was unlikely to be any more than a reduction in size of the business. In the context of the business of underwriting as member of Lloyd’s, there was no change in the scale or nature of underwriting that would qualify as a disposal of part of the business.