HC Deb 24 June 1991 vol 193 cc385-6W
Mr. Cryer

To ask the Chancellor of the Exchequer if he will list all the tax concessions available to members of Lloyd's insurance syndicates which may be set against income from sources other than underwriting profits; and if he will make a statement.

Mr. Norman Lamont

A Lloyd's underwriter carries on the business of insurance, and if he makes a loss in that business, he is entitled to effectively the same reliefs for a trading loss as any other trader. He may set the trading loss againsthis income from other sources of the same year his income from all sources of the previous year his income from underwriting in a later year.

The Government have proposed that in common with all other traders, trading losses for 1991–92 and later years may be set against capital gains.

The only difference between the reliefs for losses of Lloyd's underwriters and those of other unincorporated traders is that Lloyd's is able to set off losses against total income of the same year and the previous year. Other traders are able to set off losses against total income of the same year and the succeeding year. This difference merely reflects the fact that Lloyd's is taxed on a current year basis whereas other trades are taxed on the preceding year basis.

Mr. Cryer

To ask the Chancellor of the Exchequer if the cost of annual premiums for stop-loss insurance policies available to Lloyd's underwriters are set against tax; and if he will make a statement.

Mr. Norman Lamont

An underwriter is entitled to deduct the cost of stop-loss policies in computing his taxable profits. He is also required to include any recoveries under a stop-loss policy as income in computing his profits. The position is no different from the tax treatment of comparable insurance policies taken out by other trades.