Whole business securitisations—UK tax considerations
Whole business securitisations—UK tax considerations

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

  • Whole business securitisations—UK tax considerations
  • What is a whole business securitisation?
  • Taxation under the permanent securitisation regime
  • Whole business securitisations—tax covenant
  • Whole business securitisations—VAT grouping
  • Whole business securitisations—tax treatment of note-issuing company

This Practice Note:

  1. explains what a whole business securitisation is—a whole business securitisation may also be referred to as an operating asset securitisation

  2. outlines the key tax considerations that arise on a whole business securitisation due to the fact that the companies involved in the securitisation form part of a wider corporate group, including that:

    1. it is standard for the wider corporate group to give a tax deed of covenant (a tax covenant) in favour of the securitisation group

    2. generally the companies involved in the securitisation should not form part of a VAT group with members that are not part of the securitisation group (see further below), and

  3. suggests how tax-effective hedging can be achieved in cases where the issuer fails to qualify as a note-issuing company for the permanent securitisation regime

For a guide on what to include in a tax opinion on a whole business securitisation, see Practice Note: Whole business securitisations—the UK tax opinion.

For the tax considerations relevant to an asset-backed securitisation, see Practice Notes:

  1. Asset-backed securitisations—the UK tax treatment, and

  2. Asset-backed securitisations—the UK tax opinion

What is a whole business securitisation?

A whole business securitisation (also known as an operating asset securitisation) differs from the usual asset-backed securitisation transactions in that it does not involve a sale of a pool of assets to a special purpose vehicle