Lloyd's Maritime and Commercial Law Quarterly
BOOK REVIEW - TAXATION OF LLOYD’S UNDERWRITERS (2ND EDITION)
TAXATION OF LLOYD’S UNDERWRITERS (2nd Edition) by K. S. Carmichael, C.B.E., F.C.A., F.T.I.I. (Longcrofts) and P. H. Wolstenholme, M.A., F.C.A. (Spicer and Pegler). Butterworths, London (1985, xvii and 114 pp., plus 31 pp. Appendices and 4 pp. Index). Paperback £12.
The purpose of this book is to assist underwriting members and their professional advisers to deal with the taxation of a member’s income. This book is of assistance to accountants but, in my view, despite the author’s claims, the subject is so complex that lay underwriting members would be ill-advised to rely exclusively on guidance afforded by it.
The layout of the book is clear with numbered paragraphs and good cross-referencing. It deals in a logical order with the life-cycle of an underwriting member from joining to retirement or death. The first chapter deals with joining Lloyd’s. The information is accurate but the list of acceptable assets under the certificate of means on p. 3 is badly set out and so is misleading.
The income tax provisions on income from Lloyd’s are presented and it is stressed that underwriting accounts are kept open for three years. The result is that the underwriting member does not receive profits for those three years. There is good use of examples of accounts, which enhance the description. Throughout the book, the worked examples together with the accompanying notes are clearly set out and a valuable aid to understanding.
The chapter on retirement and death covers income tax, capital gains tax and capital transfer tax. The capital transfer tax section also gives some valuable tax planning advice. For example, it is stressed that business relief is given on the underwriting interest; and it is, therefore, wise to ensure that this is not wasted by leaving that interest to the surviving spouse where there would be a complete exemption.
There is a new chapter in this edition on the taxation of names resident outside the United Kingdom. It covers in particular the United States, Canada, Australia, Guernsey, New Zealand and South Africa. There is more information for residents in the United States and Canada in the appendices. The appendices contain useful information but are less helpful than they might be as they have not been indexed.
The book is published in association with the Institute of Chartered Accountants and, as a working manual for those advising underwriting members, it can be recommended as a clear guide.