UK Budget – no mention of captive consultation
The lack of any mention in the 2024 UK annual Budget of a consultation period to look at making the UK a domicile friendly to captives has been highlighted as a missed opportunity by market commentators.
On Wednesday October 30, Rachel Reeves, the Chancellor of the Exchequer in the UK after the Labour victory in the July General Election, laid out the details of the latest UK Budget.
It had been hoped that Reeves would have retained the plans tentatively put in place by the previous Conservative Government for a captive consultation exercise to look into the UK becoming a captive domicile. The consultation was supposed to happen in Spring 2024, but did not occur.
However, nothing was announced in the first Labour Budget for almost 15 years.
Chris Lay, chief executive of Marsh McLennan UK, said: “We are disappointed that the consultation on a UK captive regime has not been launched. The UK is home to a world leading insurance market and could become an important home for captive insurers.
“At present, our current regulatory framework makes it hard for us to compete. Establishing a proportionate and competitive UK captive framework could deliver a major boost to the UK insurance market, demonstrating our innovation and signalling we are open for business.”
However, according to Julia Graham, chief executive of Airmic, there is still time to make an announcement. In a statement she said: “Airmic supports the creation of a separate regulatory regime for captives that could allow the UK to develop as an attractive domicile for captives. In joint communications with the Treasury, the Treasury has talked about possible relevant announcements at a set-piece event such as the Budget or Mansion House Dinner. The Treasury has agreed that Rachel Reeves will make her debut Mansion House speech as chancellor on November 14. We remain hopeful that this event might provide the government with the opportunity to announce a consultation on captives.”
And Esme Gould, head of captives at Zurich Insurance, also commented: “As a major captives insurance partner, we have been calling for the Government to publish a consultation on a UK captives regime, which would bring capital into the UK and could attract new companies looking to set up under a domestic regime. The consultation was not announced in today’s Budget, but we are hopeful that it is still being considered, as with the right regulatory structures and the expertise within the London insurance market, the UK could be a popular jurisdiction for captives.”
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