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Fidentia Services LLP provides an administrative service for Namecos and Limited Liability partnerships (LLPs) underwriting at Lloyd's.

This includes all the management and administration services necessary to ensure the proper management and conduct of each vehicle. We deal with all the compliance, accounting, audit arrangements and HM Revenue & Customs reporting. Fidentia can also assist with the administration of a company after its Lloyd's affairs have been completed.

Details of Fidentia’s annual fee for 2021 can be found under the Cost and Terms section

The information contained herein is provided in good faith and is believed to be correct. However this is a general guide only and should not be regarded as a substitute for detailed advice. Fidentia Services LLP, Duncan & Toplis Limited, their partners, directors or employees accept no liability for any losses occasioned to any persons acting or refraining from acting on the basis of the material contained or omitted. Professional advice should always be sought before undertaking any transactions. Please note that the tax information relates to UK-resident individuals only.

For further information please contact:
Mike Argyle on T: 01476 591200 E: mike.argyle@duntop.co.uk
Tom Hindmarch on T: 01780 750888 E: tom.hindmarch@duntop.co.uk
Rebecca Bright on T: 01476 591200 E: rebecca.bright@duntop.co.uk
Richard Cocks on T: 01476 591200 E: richard.cocks@duntop.co.uk

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Alpha Insurance Analysts

Fidentia Services LLP is a joint venture with Alpha Insurance Analysts Limited (Alpha). Alpha is a Lloyd’s members’ agency, authorised and regulated by the Financial Conduct Authority, that represents and advises third party members of Lloyd’s, both private and corporate, on their underwriting affairs and administration. Lloyd’s offers a unique diversifying investment that can produce high returns on a limited liability basis.

Fidentia was formed in 2008 by Alpha Insurance Analysts Limited (Alpha) and Duncan & Toplis Limited (D&T) to provide a one-stop administration, accounts, tax and audit service for LLPs and Namecos underwriting at Lloyd's.

Fidentia works closely with Alpha to provide a timely and efficient management operation to run alongside the Members' Agent and advisory services provided to members of Lloyd's by Alpha. As with Alpha, our objective is to set a new benchmark for service in this area, exceeding that experienced by underwriting members in the past.

We also now look after several entities who retain a Members' Agent other than Alpha. Fidentia does not look after any Scottish Limited Partnerships.

Fidentia has at its disposal the accounting and tax expertise of D&T, a top 40 accountancy firm, with over 40 years experience of dealing with Lloyd's Members.

Independent audit will be provided by Humphrey and Co, also a firm with many years experience of Lloyd's affairs. By virtue of having to prepare accounts under schedule 3 of the Companies Act 2006, LLPs and Namecos at Lloyd's are not able to take advantage of audit exemptions available to small companies: the audit therefore is compulsory.

The service provided by Fidentia will consist of the following:

  • Bookkeeping and accounts preparation.
  • Annual audit.
  • Preparation of annual tax return for the LLP or Nameco.
  • Provision of two designated members for LLPs and director/company secretary for Namecos to deal with Lloyd's and Companies Act requirements and administrative matters.
  • Provision of sterling and US dollar client bank accounts, with HSBC, for each LLP or Nameco.
  • In conjunction with the Members' Agent, ensuring compliance with Lloyd's regulations.

Preparation of tax returns for persons other than the underwriting LLP or Nameco is not included, but D&T will be happy to provide quotations for these, together with any ad hoc tax advice that members and/or the LLP/Nameco may require on an individual basis.

Our base fee for 2021 is £3,000 plus VAT. In addition, we charge on to our clients the amount charged to us by Lloyd’s for provision to us of `Schedule 3’ accounting information required to produce the LLP and Nameco accounts. For most clients, this will entail an additional charge of £130 plus VAT but those writing over £2M will be more, up to a maximum of £520 plus VAT for those writing over £10M.

LLPs and Namecos will be asked to sign a Management Agreement reflecting the above terms. Changes in fees for the following year of account will be notified to clients by the preceding 31st August.

Corporate capital was introduced into the market for the 1994 account and the first unlimited members began to convert to limited liability underwriting status in 1996 with the introduction of Scottish Limited Partnerships. Namecos were introduced for the 1997 account and this meant that members could underwrite on a limited liability basis through a limited company over which they had 100% control. LLPs were available from 2007.

All new investors at Lloyd's must invest on a limited liability basis and this can be either as a Nameco or as a Limited Liability Partnership (LLP). Existing unlimited liability members can also convert their underwriting into either a Nameco or a LLP. Subject to various conditions, this conversion can be undertaken without interruption to the unlimited liability members' entitlement to Business Asset Disposal Relief (Capital Gains Tax) on their syndicate capacity and Business Property Relief (Inheritance Tax) on their overall Lloyd's interest.

Income taxes are paid on profits approximately three years in arrears – for example, profits arising in the Lloyd's accounting year to 31 December 2021 will be taxed in the year ended 31 December 2024 for a Nameco and the tax year 2024/25 for members ('partners') of a LLP. Taxable figures are based on the profits accrued in the relevant year, irrespective of when the cash is paid out to underwriting members.

The majority of the Namecos and LLPs currently administered by Fidentia Services LLP are members through Alpha Insurance Analysts members' agency.

  • A single individual or a group can participate in a Nameco.
  • A Nameco provides capital to support its underwriting which is lodged at Lloyd’s as funds at Lloyd’s (FAL). The level of FAL required is determined by (a) the overall capacity underwritten by the Nameco and (b) the Nameco’s economic capital assessment ratio which is set by Lloyd’s. Most new and converting Namecos are required to deposit FAL equivalent to a capital ratio of 40% of their overall underwriting capacity, subject to a minimum capital requirement. This capital ratio will increase over subsequent years as the Nameco’s FAL is used also to support additional years of account.
  • The minimum capital requirement for a new-money Nameco is £350,000 or 40% of the premium income limit whichever is the higher. The minimum capital requirement for a single unlimited member converting to a Nameco is £100,000.
  • Namecos can be set up new, or can be purchased from existing owners, subject to availability.
  • Namecos are liable to pay corporation tax on any profits or capital gains realised during an accounting period at the normal corporation tax rates.
  • The Nameco can choose to retain its underwriting profits, or pay some or all of them out as dividends or salary. In each tax year, an individual is entitled to a £2,000 tax-free allowance on their dividend income. If dividends received in a tax year are less than £2,000, the income will not be liable to income tax. However, where dividends received exceed £2,000, the excess income above the £2,000 will be taxed at the dividend income tax rates of 7.5%/32.5%/38.1% for basic rate, higher rate and additional rate taxpayers respectively.
  • Losses sustained by the underwriting activities of the Nameco can be carried back for one year or carried forward and offset against future profits of the company. They cannot be relieved against non-Lloyd's income of the shareholders. However, in the March 2021 budget, it was announced that Namecos which make losses during the years ended 31 December 2020 and 31 December 2021 will be able to carry back these losses 3 years rather than just one year, against profits made in the later years first.
  • Ownership of the Nameco can be bequeathed on death so that the company can continue to underwrite at Lloyd's.
  • If the owner of the Nameco wishes to resign from the market, then the entire company can be sold, subject to demand. The potential price of such a sale would include the value of the syndicate capacity and a proportion of the pipeline profits.
  • When a Nameco ceases to underwrite, Lloyd's requires the company to remain in existence as a dormant entity. If this stage is reached, then Fidentia are able to arrange this administrative service for a one-off fixed fee at the time.
  • Business Asset Disposal Relief may be available to shareholders on the sale of their entire stake in a Nameco. Please see tax section for more information regarding disposals.
  • Shares in a Nameco can be gifted and bequeathed. Holdover relief for gains may be available on gifts.
  • Lloyd’s will charge an application fee to set up a Nameco. For applications made during 2021, the fee will be £5,250 if it is classed by Lloyd’s as a simple structure and £10,500 if classed as a complex structure. We will clarify the cost for you once we have examined your proposed structure. Lloyd’s will apply a 10% discount where an unlimited member converts or an existing member sets up a new Nameco provided there are no additional applicants unknown to Lloyd’s. Lloyd’s will also charge fees where the application includes a third party funds at Lloyd’s owner, the fee will depend on the complexity of the structure of the third party. The Lloyd’s fee to set up a Nameco with non-private capital will be £52,000. Members’ agents also charge fees for new applications.
  • LLPs were introduced for the 2007 account, so that individuals could underwrite at Lloyd's within an English Limited Liability Partnership.
  • A single individual or a group can form a LLP.
  • A LLP provides capital to support its underwriting which is lodged at Lloyd’s as funds at Lloyd’s (FAL). The level of FAL required is determined by (a) the overall capacity underwritten by the LLP and (b) the LLP’s economic capital assessment ratio which is set by Lloyd’s. Most new and converting LLPs are required to deposit FAL equivalent to a capital ratio of 40% of their overall underwriting capacity, subject to a minimum capital requirement. This capital ratio will increase over subsequent years as the LLP’s FAL is used also to support additional years of account.
  • The minimum capital requirement for a new-money LLP is £350,000 or 40% of the premium income limit whichever is the higher, with each individual member in the LLP providing a percentage share in accordance with the member’s percentage loss share in the LLP.
  • Underwriting profits are deemed to be earned income and are taxed as such. Earnings from the LLP are pensionable subject to any maximum contribution levels which may appertain to an individual's circumstances at the time and are dealt with and taxed at individual partner level and not at LLP level.
  • A partner's trading losses can be offset against a partner's share of gains and future profits made by the LLP, or against his/her other income in the current or previous tax year. However, in the March 2021 budget, it was announced that for LLPs which make losses during the years ended 31 December 2020 and 31 December 2021, the members will be able to carry back their trading losses 3 years against both their trading profits and other income of previous tax years, with the later years offset first.
  • If a partner wishes to resign from the LLP, the share is first offered to the other underwriting partners. If all underwriting partners wish to cease involvement then the LLP may be sold to a third party, subject to demand. Alternatively, the capacity can be sold at auction and the LLP liquidated with cash from realised assets and pipeline profits, as they are paid out by Lloyd's, being distributed to the partners.
  • When a LLP ceases to underwrite, Lloyd's requires it to remain in existence as a dormant entity. If this stage is reached, then Fidentia are able to arrange this administrative service for a one-off fixed fee at the time.
  • 100% Business Property Relief is available on a partner's share of the underwriting capital and assets of a LLP after 2 years of trading. This reduces the inheritance tax liability on a partner's estate.
  • When a partner disposes of the entire interest in a LLP, Business Asset Disposal Relief may be available. Please see the tax section for more information.
  • Lloyd’s will charge an application fee to set up a LLP. For applications made during 2021, the fee will be £5,250 if it is classed by Lloyd’s as a simple structure and £10,500 if classed as a complex structure. We will clarify the cost for you once we have examined your proposed structure. Lloyd’s will apply a 10% discount where an unlimited member converts or an existing member sets up a new LLP provided there are no additional applicants unknown to Lloyd’s. Lloyd’s will also charge fees where the application includes a third party funds at Lloyd’s owner, the fee will depend on the complexity of the structure of the third party. The Lloyd’s fee to set up a LLP with non-private capital will be £52,000. Members’ agents also charge fees for new applications.

When am I taxed?

Lloyd's profits are taxed on a three year time lag. The underwriting result (net of expenses) for the 2021 calendar year will be taxed in 2024 – year to 31st December 2024 for Namecos, and tax year 2024/25 for LLP members.

Sales of capacity are subject to capital gains tax in the (tax) year of sale.

Taxes on Income

LLPs

Whilst the LLP is a limited liability entity, it does not exist for tax purposes.

Therefore, for LLP members, the tax treatment is the same as for any partnership – each member is taxed on their share of the profits, regardless of whether these are withdrawn from the LLP, at their highest marginal rate of tax. They will also be liable to Class 2 and Class 4 National Insurance Contributions, where applicable.

New Legislation, enacted in Summer 2014, restricts the amount of LLP profits which can be allocated to non-natural members of LLPs (i.e. trusts or companies), where the LLP also contains individuals as members. If you would like to have a non-natural person as a member of a LLP, this new legislation must be considered in detail before setting up a structure such as this.

Converting Names may have an existing Special Reserve Fund (SRF). SRF may not be added to from LLP profits. In principle, it will be released once all open years for the unlimited Name have closed and will be taxable in full at that time.

The income earned from the LLP will be 'pensionable' income for the LLP members, under current pension legislation.

It has previously been possible for LLPs to make a tax-deductible notional transfer to a Claims Equalisation Reserve (CER). This is no longer the case from January 2016, and transfers previously made are now unwinding, resulting in taxable profits arising.

Namecos

A Nameco is again a limited liability vehicle. However, a Nameco has a separate tax identity of its own and, as a result, pays corporation tax on its underwriting profits. Currently Nameco’s will pay Corporation Tax at a rate of 19% on any taxable profits they make. However, in the March 2021 budget, it was announced that from 1 April 2023 these rules will be changing. The effects of these changes are that where a Nameco makes taxable profits of less than £50,000, then the profits will only be charged to Corporation tax at a rate of 19%, whereas where a Nameco makes profits in excess of £250,000, then it will pay Corporation Tax at a rate of 25% on the whole taxable profits. Additionally, where Nameco’s have taxable profits of between £50,000 and £250,000, it will pay Corporation Tax at a rate of 19% on £50,000 of the profits and the rest of its profits will be taxed at a rate of 26.5%. Furthermore, where Nameco’s are in a corporate group, the £50,000 and £250,000 thresholds will be reduced based on the amount of companies that the Nameco is ‘connected’ to.

As with the LLP, it has also been possible for Namecos to make CER transfers, and again these are now reversing.

As the Nameco is a separate legal entity with its own tax liability, the post-tax profits in the company can either be used to:

  • Increase cash reserves or investments within the company.
  • Repay any loans owed to shareholders/directors.
  • Pay salary or pension contributions.
  • Pay dividends to shareholders.

    Key Dates (Fidentia will arrange for the Lloyd's Member)


  • 31 January - Filing of Partnership (LLP) tax return at HMRC
  • 31 January - Filing of Schedule 2 with Lloyd's
  • 31 January - Due date of payment for individual’s income tax liability
  • February - Filing of annual confirmation Statement at Companies House
  • 31 March - Filing of Declaration of Compliance with Lloyd's
  • May - Distribution of results
  • May/June – Collection of losses
  • May/June – Addition of capital for coming-into-line
  • 30 September - Filing of annual accounts at Companies House
  • 1 October – Due date of payment for Nameco’s Corporation Tax liability
  • November – Addition of capital for coming-into-line
  • 31 December - Filing of Corporation tax return (Nameco) at HMRC

If you are currently looked after by an alternative provider, you will need to give the appropriate notice to them to be able to join us. It is normal practice for the change-over to coincide with the end of year of account, for example if you give notice to leave as at 31 December 2021 the bookkeeping and administration will transfer to us on that date. Your existing provider will still be responsible for preparing and auditing your annual accounts for the period up to 31 December 2021. We will then prepare and audit your accounts for the period to 31 December 2022.

For further information please contact:
Mike Argyle on T: 01476 591200 E: mike.argyle@duntop.co.uk
Tom Hindmarch on T: 01780 750888 E: tom.hindmarch@duntop.co.uk
Rebecca Bright on T: 01476 591200 E: rebecca.bright@duntop.co.uk
Richard Cocks on T: 01476 591200 E: richard.cocks@duntop.co.uk

Click here to download the contact details of the Fidentia Team

Fidentia Services LLP

Registered address:3 Castlegate, Grantham, Lincolnshire, NG31 6SF.
Registered company number: OC337225.

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