Lancashire Moving Tax Base To UK

July 27, 2011

Departure LoungeLancashire Holdings Limited announced that it intends to move its tax residence to the UK, citing planned UK tax reforms as the reason.

Its Bermuda-based insurance subsidiary will continue to operate and be incorporated in Bermuda.

A statement released by the company yesterday [July 26] said, “Lancashire is currently based in Bermuda and has both UK and Bermuda-based insurance subsidiaries.”

“Lancashire’s Board of Directors has been reviewing its Bermudian tax residence at regular intervals and, following the publication of the latest proposals for the reform of the UK’s Controlled Foreign Companies (“CFC”) rules, Lancashire intends to move its tax residence to the UK.”

“In advance of the proposed move, Lancashire will seek shareholder approval for a change in its bye-laws to permit Board meetings to be held in the UK. In moving its residence to the UK, Lancashire expects to meet the conditions for the temporary period exemption from the UK’s CFC rules which is being introduced by the UK Finance Act 2011. This should therefore not impact Lancashire’s UK tax position.”

“Lancashire is not required to move its place of incorporation in order to qualify for the temporary period exemption, and currently intends to remain incorporated in Bermuda. Its Bermuda-based insurance subsidiary will continue to operate and be incorporated in Bermuda.”

“Lancashire welcomes the UK Government’s wish to explore ways of treating business written in the UK, but with limited UK connection, more favourably under the new CFC regime. Lancashire, in conjunction with other corporations, will be responding to the Government’s consultation over the coming months with a view to ensuring that the final CFC rules operate fairly.”

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  1. Chart says:

    This has been rumoured for a long while .. at least they’ve ‘fessed up now. Not good news for Bermuda. Wonder when the others will admit to their planned exits. There are others saying publicly “everything’s groovy” while transferring staff out each month.