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.