Section 173.
Modifications etc. (not altering text)
1In this Part of this Schedule “profit or loss”, in relation to a syndicate, means the aggregate amount of such of the profits or losses of all the members of the syndicate (taken together) as arise—
(a)directly from their membership of the syndicate, or
(b)from assets forming part of premiums trust funds,
and “profits” and “losses” shall be construed accordingly.
2(1)An inspector may, at any time [F1after the beginning of a year of assessment], by notice in writing to a syndicate’s managing agent require him to deliver to the inspector, on or before the final day determined under sub-paragraph (2) below, a return of the syndicate’s profit or loss for the year of assessment—U.K.
(a)containing such information as may be required in pursuance of the notice; and
(b)accompanied by such accounts, statements and reports as may be so required.
(2)The final day for the delivery of any return required by a notice under sub-paragraph (1) above is whichever is the later of—
(a)[F21st September in the year of assessment]; and
(b)the end of the period of three months beginning on the day following that on which the notice was served.
(3)If a syndicate’s managing agent, having been required by a notice under sub-paragraph (1) above to deliver a return, fails to deliver the return on or before the final date for its delivery, he shall be liable to a penalty equal to the prescribed amount multiplied by the number of days on which the failure continues.
(4)In sub-paragraph (3) above “the prescribed amount” means £60 for each fifty members of the syndicate (counting any number of members less than fifty, and any number left over, as fifty).
(5)If a syndicate’s managing agent fraudulently or negligently delivers an incorrect return under sub-paragraph (1) above, he shall be liable to a penalty not exceeding £3,000 multiplied by the number of members of the syndicate.
(6)In relation to a return required by a notice under sub-paragraph (1) above—
(a)any reference in sub-paragraph (2) or (3) above to the delivery of the return is a reference to its delivery together with the accompanying documents referred to in sub-paragraph (1) above; and
(b)the reference in sub-paragraph (5) above to the return being incorrect includes a reference to any of those documents being incorrect.
Textual Amendments
F1Words in Sch. 19 para. 2(1) substituted (3.5.1994 with effect for the year 1997-98 and subsequent years of assessment) by 1994 c. 9, s. 228, Sch. 21 para. 9(1)(3)
F2Words in Sch. 19 para. 2(2) substituted (3.5.1994 with effect for the year 1997-98 and subsequent years of assessment) by 1994 c. 9, s. 228, Sch. 21 para. 9(2)(3)
3(1)If the inspector is satisfied that a return under paragraph 2(1) above affords correct and complete information concerning the syndicate’s profit or loss for a year of assessment, he shall determine that profit or loss accordingly.U.K.
(2)If for a year of assessment the inspector is dissatisfied with a return under paragraph 2(1) above, or there is no such return, the inspector shall determine the syndicate’s profit or loss for that year to the best of his judgment.
(3)If the inspector discovers that a determination under sub-paragraph (1) or (2) above—
(a)understates the syndicate’s profits for the year of assessment; or
(b)overstates the syndicate’s losses for that year,
he may, by a determination under this sub-paragraph, vary the first-mentioned determination accordingly.
(4)Notice of a determination under this paragraph shall be served on the syndicate’s managing agent and shall state the time within which any appeal against the determination may be made under paragraph 4 below.
(5)After notice of a determination under this paragraph has been served on the syndicate’s managing agent, the determination shall not be altered except in accordance with the express provisions of the Taxes Acts.
4(1)A syndicate’s managing agent may appeal against a determination under paragraph 3 above by a notice of appeal in writing given to the inspector within thirty days after the date of the notice of determination.
(2)An appeal under this paragraph shall be to the General Commissioners, except that the agent may elect (in accordance with section 46(1) of the Management Act) to bring the appeal before the Special Commissioners instead of the General Commissioners.
(3)Subsections (5) to (5E) of section 31 of the Management Act shall apply for the purposes of an election under sub-paragraph (2) above as they apply for the purposes of an election under subsection (4) of that section.
5(1)Where a syndicate’s managing agent appeals against a determination under paragraph 3 above, then, for the purpose of establishing, in the event of a member of the syndicate appealing against an assessment made on him, the amount of tax the payment of which should, pending the determination of that appeal, be postponed under section 55 of the Management Act, that section shall apply to the first-mentioned appeal with the modifications specified in sub-paragraph (2) below.U.K.
(2)The modifications are as follows—
(a)any reference to the notice of assessment shall be construed as a reference to the notice of determination;
(b)any reference to the appellant believing that he is overcharged to tax by the assessment shall be construed as a reference to him believing that the determination overstates the syndicate’s profits, or understates the syndicate’s losses, for the year of assessment;
(c)any reference to the appellant having grounds for so believing, or there being reasonable grounds for so believing, shall be construed in accordance with paragraph (b) above;
(d)any reference to a determination of the amount of tax the payment of which should be postponed pending the determination of the appeal shall be construed as a reference to a direction that the determination shall, pending the determination of the appeal, have effect for the purpose stated in sub-paragraph (1) above as if the syndicate’s profits there stated were reduced, or the syndicate’s losses there stated were increased, by such amount as may be specified in the direction;
(e)any reference to an amount of tax so determined, or to the amount of tax which should be so postponed, shall be construed in accordance with paragraph (d) above; and
(f)subsections (2) and (9) and, in subsection (6), paragraphs (a) and (b) and the word “and” immediately preceding paragraph (a) shall be omitted.
6(1)Where a determination of a syndicate’s profit or loss for a year of assessment is made, varied or modified (whether under the foregoing provisions of this Schedule or on appeal), the inspector may, by notice in writing to the syndicate’s managing agent, require him to make to the inspector, within the specified period, a return apportioning, between the members of the syndicate, the syndicate’s profit or loss as stated in the determination as so made, varied or modified.U.K.
(2)If a syndicate’s managing agent, having been required by a notice under sub-paragraph (1) above to deliver a return within the specified period, fails to deliver the return within that period, he shall be liable to a penalty equal to the prescribed amount multiplied by the number of days on which the failure continues.
(3)In sub-paragraph (2) above “the prescribed amount” means £5 for each fifty members of the syndicate (counting any number of members less than fifty, and any number left over, as fifty).
(4)In this paragraph “the specified period” means such period, not being less than thirty days and beginning with the day following the date of the notice under sub-paragraph (1) above, as may be specified in that notice.
7(1)A determination of a syndicate’s profit or loss for a year of assessment (whether as originally made or as varied or modified) shall, for the purpose of determining the liability to tax of each member of the syndicate, be conclusive against that member that the syndicate’s profit or loss for that year is as there stated.
(2)Where a determination of a syndicate’s profit or loss for a year of assessment is varied or modified at any time after the issue of a notice of assessment assessing any member of the syndicate to tax—
(a)section 31 of the Management Act (right of appeal) and section 55 of that Act (postponement of tax) shall have effect, in relation to that member, as if any reference to the date of the notice of assessment, or the date of the issue of the notice of assessment, were a reference to the date of the variation or modification; and
(b)in the case of a variation, an assessment which gives effect to the determination as varied shall not be out of time if it is made within one year of the date of the variation.
(3)Sub-paragraph (2)(b) above shall not apply in the case of a variation under paragraph 3(3) above which is made later than six years after the end of the closing year.
Modifications etc. (not altering text)
C2Sch. 19 para. 7 excluded (28.7.2000 with effect as mentioned in s. 107(12)(a) of the amending Act) by 2000 c. 17, s. 107(10)
8U.K.For the purposes of sections 36 and 40 of the Management Act (extension of time in cases of fraudulent or negligent conduct) anything done or omitted to be done by a syndicate’s managing agent shall be deemed to have been done or omitted to be done by each member of the syndicate.
Textual Amendments
F3Sch. 19 Pt. II repealed (3.5.1994 with effect for the year 1994-95 and subsequent years of assessment) by 1994 c. 9, ss. 228, 258, Sch. 21 para. 10, Sch. 26 Pt. V(25) Note 6
Modifications etc. (not altering text)
C3Sch. 19 Pt. II modified (9.3.1995 with effect for the years of assessment 1992-93 and 1993-94 only) by S.I. 1995/352, reg. 3(1)(3)
13(1)In relation to an underwriting year, a syndicate’s managing agent may, by notice in writing at any time during the period of six years beginning with the 1st March next following the end of the closing year for that year, make a claim to the inspector—
(a)for the repayment of tax suffered by way of deduction on such of the syndicate’s investment income as is allocated to that year in accordance with the rules or practice of Lloyd’s; or
(b)for the payment of the tax credit in respect of any qualifying distribution forming part of such of that income as is so allocated.
(2)The syndicate’s managing agent shall provide such information in support of the claim as the inspector may reasonably require.
(3)Where an amount is repaid or paid to a syndicate’s managing agent under this paragraph, he shall—
(a)apportion that amount between the members of the syndicate in proportion to their interests in that part of the syndicate’s investment income which has suffered tax by way of deduction or (as the case may be) that part of that income which includes the qualifying distribution; and
(b)except in so far as it is required to meet a share of a loss of the syndicate, pay the amount so apportioned to each member, within 90 days of the repayment, to the members’ agent of that member.
[F4(3A)For the purposes of this paragraph a member who is not resident in the United Kingdom shall be treated as entitled to all such tax credits in respect of qualifying distributions as he would be entitled to if he were so resident.]
(4)The provisions of section 824 of the Taxes Act 1988 (repayment supplements: individuals and others) shall not apply to any repayment of tax made under this paragraph.
[F5(4A)Where any payment of a tax credit is made under sub-paragraph (1)(b) above—
(a)each apportioned part of the tax credit which is paid to the members’ agent of a member under sub-paragraph (3)(b) above shall be treated, for the purposes of section 171 of this Act and all other purposes of the Income Tax Acts, as part of the profits arising to the member from assets forming part of a premiums trust fund; but
(b)subject to that, the tax credit shall be ignored for all purposes of the Income Tax Acts.]
(5)In this paragraph “investment income”, in relation a syndicate, means the aggregate amount of the profits arising to all the members of the syndicate (taken together) from assets forming part of premiums trust funds.
Textual Amendments
F4Sch. 19 para. 13(3A) inserted (3.5.1994 with effect as respects the underwriting year 1992 and subsequent underwriting years) by 1994 c. 9, s. 228, Sch. 21 para. 11(1)(3)
F5Sch. 19 para. 13(4A) inserted (3.5.1994 with effect as respects the underwriting year 1992 and subsequent underwriting years) by 1994 c. 9, s. 228, Sch. 21 para. 11(2)(3)