New exemption from UK stamp taxes on insurance-linked securities (ILSs) | Hogan Lovells


Transfers of insurance-linked bonds which meet certain conditions will be exempt from UK stamp duties from 17 May 2022. This will be of particular relevance to the insurance sector where such bonds are issued in connection with insurance risk transformation activities.

The aim of the new exemption is to reduce the cost and complexity of ILS arrangements and make the UK a more attractive jurisdiction for their location.

The exemption applies to ILSs which are capital market investments issued as part of a capital market arrangement by a “qualifying transformer vehicle” (i.e. an insurance SPV which meets the conditions prescribed by the Risk Transformation (Tax) Regulations 2017). This means that the exemption applies only to ILSs which are bonds and not shares.


The exemption will not apply to ILSs which carry a right of conversion into, or a right to the acquisition of, other securities unless such securities are ILSs which are issued by the same SPV and to which the exemption would apply.

SPVs which fall within the exclusion from the UK corporation tax exemption under the Risk Transformation (Tax) Regulations 2017 will not be able to benefit from the stamp duties exemption.

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