Scope
This UK tax strategy applies to UK resident corporations in the consolidated insurance group
of Fairfax Financial Holdings Limited (“Fairfax Financial”) as well as to any UK branches of non‐
UK corporations in the Fairfax Financial consolidated insurance group (together, “Fairfax UK
businesses”). References to “Fairfax” shall be read as references to the Fairfax Financial
consolidated insurance group.
Fairfax regards this document as complying with the requirements of Schedule 19 to the
Finance Act 2016 (UK) to publish a UK tax strategy.
Overview
Fairfax, including the Fairfax UK businesses, operates primarily in the insurance industry and
is therefore subject to stringent regulatory rules and requirements in many jurisdictions
around the world. In addition to complying with regulatory requirements, Fairfax Financial
has formal Guiding Principles which have been in effect for over 35 years, and Fairfax is
subject to a Business Code of Conduct and Ethics. Fairfax’s UK tax strategy stems from one of
the Guiding Principles, which is that “honesty and integrity are essential in all our relationships
and will never be compromised.”
The tax affairs of Fairfax’s UK businesses are managed in a way which takes into account their
corporate reputation as well as the best interests of Fairfax UK businesses and various
stakeholders, including shareholders and employees. Set out below is Fairfax’s UK tax strategy
as it relates to UK tax risk management and governance, UK tax planning, and relationships
with UK tax authorities.
UK tax risk management and governance
Fairfax’s UK tax strategy is the overall responsibility of Fairfax Financial’s Chief Financial
Officer (CFO), who reports on material tax matters to Fairfax Financial’s Board of Directors at
regularly scheduled Board meetings. The UK tax strategy applies consistently to all Fairfax UK
businesses. Day to day management of tax affairs and tax risks of Fairfax UK businesses, and
primary responsibility for delivering the UK tax strategy, sit with the CFO of each Fairfax UK
business. The CFOs rely on the expertise of one or more of an internal tax team of a Fairfax
UK business, the global Fairfax tax team and external advisors.
An important component of Fairfax’s UK tax strategy is risk management. Enterprise risk
management architecture that is a requirement of Solvency II insurance regulations is fully
embedded in the Fairfax UK businesses. In addition, where applicable, Fairfax UK businesses
maintain internal control frameworks which comply both with Sarbanes‐Oxley requirements
and with the UK’s Senior Accounting Officer legislation which requires businesses to establish
and maintain appropriate tax accounting arrangements. The control frameworks include
measures intended to identify, assess and manage tax risks and to ensure compliance with
tax reporting obligations. Compliance with these control frameworks is reviewed at regular
intervals by management of the Fairfax UK businesses and/or by their internal audit teams.
The Fairfax UK businesses also have procedures designed to prevent persons associated with
the Fairfax UK businesses from committing tax evasion facilitation offences as defined in the
Criminal Finances Act 2017.
UK tax planning and tax risk appetite
Fairfax UK businesses are committed to fully complying at all times with their tax payment
and reporting obligations, including country‐by‐country reporting requirements.
The CFO of each Fairfax UK business seeks to ensure that the tax implications of all material
commercial transactions are considered by one or more of an internal Fairfax UK tax team,
the Fairfax global tax team and external advisors. Fairfax UK businesses seek to be efficient in
their tax affairs and may consider planning to make use of available tax reliefs, allowances
and other benefits, but only in accordance with applicable laws and regulations. Fairfax UK
businesses do not engage in artificial or abusive tax avoidance transactions.
Fairfax UK businesses seek to avoid uncertainty and unexpected results in their tax positions.
In any instances where tax laws are unclear or their application is uncertain, Fairfax UK
businesses will, with support from external advisors when appropriate, fully analyse and
understand any tax risks. Fairfax UK businesses are not prescriptive in terms of the level of
acceptable tax risk in respect of any particular matter as each matter is assessed based on its
specific facts and circumstances.
Relationship with UK tax authorities
Fairfax UK businesses are committed to maintaining a transparent and cooperative
relationship with HMRC (the UK tax authority). When appropriate, representatives of Fairfax
UK businesses meet with the HMRC Customer Compliance Manager in order to maintain real
time engagement regarding business developments and risks. Fairfax UK businesses are
committed to ensuring that they are responsive to requests for information by HMRC and
that the information they provide is accurate and complete. Where appropriate, Fairfax UK
businesses will seek advance tax rulings from HMRC prior to undertaking certain transactions.
