Asset-backed securitisations—the UK tax treatment
Asset-backed securitisations—the UK tax treatment

The following Tax practice note provides comprehensive and up to date legal information covering:

  • Asset-backed securitisations—the UK tax treatment
  • What is a securitisation?
  • Taxation of companies falling within the permanent securitisation regime
  • Corporation tax charge on margin
  • Other modifications to corporation tax
  • Why does a special tax regime apply to securitisation companies?
  • What happens if a company falls outside the securitisations regime?
  • What is a securitisation company?
  • Types of securitisation company
  • Unallowable purposes
  • More...

This Practice Note considers the UK taxation treatment of securitisation companies that fall within the scope of the permanent securitisation regime. It explains:

  1. what a securitisation is

  2. that there are five types of securitisation company

  3. the additional conditions that must be satisfied by any type of securitisation company in order for it to be taxed under the permanent securitisation regime, namely:

    1. the unallowable purposes test, and

    2. the payments condition

  4. the UK corporation tax treatment that applies to securitisation companies that satisfy all the conditions to be taxed under the permanent securitisation regime

  5. the consequences for a company of failing to fall within the permanent securitisation regime

  6. the limited recourse nature of the notes issued in a securitisation

  7. the interaction with the diverted profits tax, and

  8. the stamp duty, stamp duty reserve tax (SDRT) and VAT treatment of the securitisation transaction

This Practice Note does not cover:

  1. non-UK tax resident companies that are involved in a securitisation

  2. the temporary securitisations regime, or

  3. any transitional rules

This Practice Note focuses on the permanent securitisation regime as it applies to companies involved in an asset-backed securitisation, but the rules also apply to companies involved in other types of securitisation structures, such as whole business securitisations, provided all the conditions are satisfied for the regime to apply.

For a guide on what to include in a tax opinion on an asset-backed

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