Types of Investment Vehicles
Argenta Private Capital Limited (APCL) works closely with its private clients to create the appropriate Lloyd’s structure for their individual circumstances.
The choice of these largely depends on an individual's tax residence / status, domicile and personal preference.
Any decision to invest must be based upon a full assessment of the relevant introductory documents (available upon request), which contain important information on the key features and risks of such a form of participation, along with appropriate professional advice.
The two most common structures are:
Limited Liability Partnerships (LLPs)
A LLP is a body corporate, a separate legal entity distinct from its members who may be individuals or bodies corporate. In general terms, a LLP is transparent for tax purposes in the UK, and is consequently not a taxable entity in its own right. Profits from a LLP are treated as earned income in the hands of its members and taxed as such. Investors should be aware that legislation will be introduced in the Finance Bill 2013 to cap income tax reliefs claimed by individuals. Any underwriting losses of LLPs will be subject to this cap.
After two years, 100% Business Property Relief for UK IHT purposes is available on assets employed.
Individuals or groups resident outside the UK may have differing tax circumstances which will determine whether such a structure suits their needs.
"NameCos" are normally UK registered private limited liability companies trading as corporate members of Lloyd’s and, subject to the appropriate approval of controllers by Lloyd’s, can be formed for a single individual or for larger groups of connected investors. A NameCo is subject to UK corporation tax on any profits and, possibly as a result of relatively low levels of corporation tax in the UK, is the structure favoured by many non-UK resident investors.
NameCos have been a popular form of limited liability vehicle at Lloyd’s due to the flexibility of their structure and the ability (again subject to Lloyd’s approval) for them to be incorporated within existing corporate groups.
Other benefits include a straightforward means of transferring ownership, either between family members or through a wider disposal of shares.