Move to end Lloyd’s exodus from London

pre budget report

Gordon Brown attempted to stem the exodus of Lloyd’s insurers from London in
his pre-Budget report this week with two measures designed to ease the tax
compliance burden for members of the insurance market.

The move was part of a package of measures for both general and life
assurance companies.

Reacting to the departure of Hiscox and Omega from London for the tax free
jurisdiction of Bermuda earlier this year, Brown announced that the government
would repeal the rules for the tax treatment of general insurers’ reserves and
the transfer of trading losses between Lloyd’s corporate members.

The first measure will scrap the requirement to make tax adjustments on the
differences between the amount put in reserve for future payouts and the sum
actually paid.

The second change will enable corporate members to enjoy the same benefits as
other companies that transfer trading losses between them.

Life assurance companies also saw revamps of the way the way they report for
tax purposes.

One change related to the way in which insurance companies present their
financial statements to the FSA ­ which is different to the way in which they
report regular annual results since different rules apply.

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