Argenta offers 3 limited liability vehicles for underwriting at Lloyd's. The choice of these largely depends on an individual's tax and pension status, domicile and personal preference.
If you would like to register online for more information please read and accept the Legal Notice
The underlying investment objective at Lloyd's is to provide a proportion of the security underpinning a diverse basket of Lloyd's insurance policies and share in the returns associated with underwriting that policy. This security, called Funds at Lloyd's (FAL) can be provided by way of Letter of Credit, bank guarantees, cash or certain other qualifying investments.
Typically an investor's FAL will support a premium capacity of 2½ times its value, so a FAL value of £400,000 can support insurance business at Lloyd's of up to £1,000,000 per year. This essentially means that syndicates are authorised to accept premiums up to this level on your behalf. It is not a measure of the risk undertaken by those syndicates. FAL requirements are determined by reference to the risk profile and diversity of the business written. Portfolios focused on narrow business classes may require additional capital to support this increased risk.
Investors generally retain beneficial ownership of the assets within FAL and receive any dividends or income arising from those assets. In this way the assets can be used twice to generate returns.
Limited Liability Partnerships (LLPs)
 |
LLPs available since 2007 |
| Tax Transparent |
| Pensionable earnings |
| Retained underwriting decision making |
A LLP is a body corporate, not a partnership. The participants in a LLP are known as "members" (which in this context does not mean members of Lloyd's; the LLP would be the member of Lloyd's). In contrast to a general partnership or most other forms of limited partnership, a LLP is a separate legal entity distinct from its members.
Members may be individuals or bodies corporate. A LLP must have a minimum of two members and Argenta will provide managing and continuity members to ensure that no breach of this rule occurs. The relationships between the members of the LLP and between the LLP and its members are set out in the Members' Agreement. LLP members retain the ability to select their own underwriting portfolio.
In general terms, a LLP is tax transparent for the purposes of tax in the UK on its income and chargeable gains and thus the LLP is not a taxable entity in its own right. Profits arising attributable to LLP members are treated as earned income thus, profits from Lloyd's underwriting can be paid directly into a Qualifying Pension Scheme, with associated tax benefits.
Scottish Limited Partnerships (SLPs)
| SLPs available since 1997 |
| Tax transparent |
| Simplified accounting requirements |
| Delegated underwriting decision making |
SLPs have been trading as members of Lloyd's since 1997. They are partnerships under the Limited Partnership Act 1907, governed by Scots Law.
In order to join an SLP, individuals will enter into a Partnership Agreement as Limited Partners with a General Partner. The General Partner controls the management of the SLP (including making decisions as to underwriting policy).
There are three major distinctions between an SLP and an LLP: In order to preserve the Scottish Limited Partner's limited liability, the final decision relating to underwriting decisions must remain with the General Partner (although recommendations as to the underwriting will be made to the General Partner by Argenta Private Capital Limited in conjunction with the Limited Partner); and Second, profits arising out of an SLP are not eligible to be paid into a personal pension scheme. Finally, any business borrowings on the part of the Partner are not eligible of interest relief; they are for a member of an LLP. Again these disadvantages should be set the LLP's requirement to file Schedule 9A accounts in accordance with the Companies Act 1985.
| NameCos available since 1997 |
| Familiar UK limited company structure |
| Income paid via dividends or salary |
| Profits subject to corporation tax |
NameCos are UK registered private limited liability companies trading as a corporate member of Lloyd's. While normally formed for a single individual, these can be structured to allow connected individuals to invest alongside one-another. A Nameco is subject to UK corporation tax on any profits.
NameCos have been the most popular form of limited liability vehicle at Lloyd's due to the well understood nature of Limited Companies and their flexibility.
Argenta offers a complete Nameco service, including all accounting and company secretarial requirements.
If you would like to register online for more information please read and accept the Legal Notice
