Editing Lloyd's of London (section)

===1970s: Changes in the financial markets===
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During the 1970s, a number of issues arose which were to have significant influence on the course of the Society. The first was the tax structure in the UK: for a time, [[capital gain]]s were [[Capital gains tax|taxed]] at up to 40 per cent (nil on [[Gilt-edged securities|gilt]]s); earned income was taxed in the top bracket at 83 per cent, and investment income in the top bracket at 98 per cent. Lloyd's income counted as earned income, even for Names who did not work at Lloyd's, and this heavily influenced the direction of underwriting: in short, it was desirable for syndicates to make a (small) underwriting loss but a (larger) investment gain. The investment gain was typically achieved by "[[Bond (finance)|bond]] washing" or "gilt stripping": selling the gilt or other bond cum dividend and buying it back [[Ex-dividend date|ex-dividend]], thus forfeiting the interest income in exchange for a tax-free capital gain. Syndicate funds were also moved offshore (which later created problems through fraud and self-dealing).

Because Lloyd's was a tax shelter as well as an insurance market, the second issue affecting it was an increase in its external membership: by the end of the 1970s, the number of passive investors dwarfed the number of underwriters working in the market. The third issue related to a series of losses as a result of scandal.<ref name="e130">{{cite web | title=Business: Lloyd's Losses | website=[[Time (magazine)|Time]] | date=1980-03-03 | url=https://content.time.com/time/subscriber/article/0%2C33009%2C950302-2%2C00.html | access-date=2024-10-05}}</ref> During the decade a number of scandals had come to light, including the collapse of F. H. "Tim" Sasse's non-marine syndicate 762, which had issued large fire insurance claims that had highlighted both the lack of regulation and the lack of legal powers of the Committee of Lloyd's (as it was then) to manage the Society.<ref name="e130"/>