Assured Guaranty U.K. Tax Policy

Assured Guaranty Ltd. (AGL and, together with its subsidiaries, Assured Guaranty or the Company) is a Bermuda based and U.K. tax resident holding company that provides, through its operating subsidiaries, credit protection products to the United States (U.S.) and international public finance (including infrastructure) and structured finance markets.  AGL’s common shares are listed on the New York Stock Exchange (NYSE:AGO)

The U.K. Tax Policy outlines Assured Guaranty’s strategy with respect to its tax affairs and approach to tax risk.  It is intended to comply with the requirements under paragraph 16(2) of Schedule 19 of the U.K. Finance Act 2016 to publish the Company’s tax strategy in the current year and was adopted by the AGL Board of Directors.

Approach to risk management and governance arrangements in relation to U.K. taxation

The Company's policies and procedures relating to risk assessment and risk management are overseen by its Board of Directors (the Board). While the Board has the ultimate oversight responsibility for the risk management process, various committees of the Board also have responsibility for risk assessment and risk management. The Audit Committee of the Board is responsible for, among other matters, reviewing policies and processes related to the evaluation of risk assessment and risk management, including the Company's major financial risk exposures, including tax and the steps management has taken to monitor and control such exposures. It also reviews compliance with legal and regulatory requirements including tax.

The Chief Financial Officer (CFO) is the executive officer responsible for tax matters.  Day-to-day management of tax affairs is conducted by the Tax Director who reports to the CFO.  Updates on tax matters including U.K. tax matters are reported to the Audit Committee by the Tax Director as needed and at least annually. 

Tax risk factors are assessed and sought to be reduced with the design of internal controls over the business and the tax function that fits within an overall framework of internal controls used to support the Company’s financial reporting system. Tax controls have been put in place over tax compliance, changes in tax laws and financial reporting and disclosures over tax accounts.

Tax staff have an appropriate level of expertise, training and supervision for the tax functions they perform.

The Company has a Code of Conduct that is designed to discourage employees from engaging in activities that could jeopardize the Company’s reputation.  All employees are required to follow the ethical and professional standards laid out in the Code of Conduct.

Attitude towards tax planning as affecting U.K. taxation

It is the Company’s policy to comply with all applicable tax laws and regulations in all jurisdictions in which it operates. The Company seeks to plan its tax affairs consistently with the overall strategic business objectives, capital management of the Company and the requirements of the relevant insurance regulations. 

The Company has assigned dedicated tax staff to address tax compliance matters, work with outside tax regulators, and monitor changes in tax laws or regulations that could impact the Company.  Outside tax advisors will be used for expertise in particular areas of U.K. tax to ensure clarity and compliance with U.K. tax rules and regulations. 

The level of risk in relation to U.K. taxation that is acceptable

The Company has a low tolerance for tax risk and an overall objective of achieving certainty in its U.K. tax matters.  Its policy is not to rely on interpretations of U.K. tax law that are inconsistent with the Company’s understanding as to the underlying spirit of the law.  The Company has a strategic aim to maintain its low risk rating as determined by HM Revenue and Customs (HMRC) Business Risk Review process.    

The approach to dealings with HMRC

The Company seeks to have an open, pro-active and collaborative relationship with the HMRC.  This is done through meeting at least annually with the Customer Relationship Manager (CRM) assigned to the Company, and having regular communication to keep HMRC informed of changes in the business or to discuss tax issues arising at an early stage.

November 2017