LLM8280 - Inheritance tax: Names: valuation of the Lloyd’s interest: discounts
Various discounts are applied to both the value of open underwriting results and assets inFunds at Lloyd’s (FAL) and special reserve funds (SRFs). »Ê¹ÚÌåÓýappse discounts are inrecognition of the delay between death and the date pipeline profits are paid and thedates when FAL and SRF assets are released to the estate. »Ê¹ÚÌåÓýapp rates currently used fordiscounting purposes depend on whether the statutory audit basis is used or the actualbasis. Discounting factors are adopted using “Parry’s Tablesâ€�.
| Statutory Audit Basis | - |
|---|---|
| Deposits/Reserves | 3.5% per annum* |
| Profits (discount tables) | 6.0% per annum |
| Losses (discount tables) | 4.0% per annum |
| Concessionary Actual Basis* | Ìý |
|---|---|
| Deposits/Reserves | 3.5% per annum |
| Profits | 12.0% per annum |
| Losses | 12.0% per annum |
*less the mean of yields on 2.5% consols and the FT All Share Index net of tax.