Lancashire in deal to move tax HQ to UK

LLOYD’S insurer Lancashire set a high bar for its peers yesterday as it reported a market-beating quarterly profit and said it would return its tax base to the UK from Bermuda.

Lancashire, which insures property, oil rigs, aircraft and ships, said it made a $91m (£55.6m) second-quarter pre-tax profit, ahead of consensus expectations for $70m, and 7.7 per cent up on the same quarter last year.

And it said it had decided to move its tax base after striking a deal with the UK government to exempt it from harsh levels of tax on companies that make most of their money overseas.

Its president Neil McConachie said the exemption meant it would not change the level of corporation tax it paid, and the exemption should be permanent by 2014 in reforms to the Controlled Foreign Companies Act.

He said moving the tax base would give it “the ability to act more nimbly in making group decisions” as well as cutting costs by holding board meetings in the UK and benefiting from the UK’s large talent pool.