Commentary

D7.1305 The corporation tax charge

Corporate tax
Corporate tax | Commentary

D7.1305 The corporation tax charge

Corporate tax | Commentary

D7.1305 The corporation tax charge

A securitisation company that meets the necessary qualifying conditions is, in essence, taxable on the small amount of cash retained in the company for its own account. In practice, most amounts which are so retained by securitisation companies will be distributed sooner or later by way of dividend. The retention is in effect the same as the small 'turn' or cash profit that would in most cases have been reflected in accounts if UK GAAP as it stood at 31 December 2004 had continued to apply to such companies.

The taxable amount is the greater of RP–DS+D, and Nil, plus the 'specified amount' (see below)1.

RP is the retained profit (see D7.1307) of the company in the accounting period.

DS is any distribution received from another securitisation company that is party to the same capital market arrangement (CMA2) and which is made from the other company's retained profit. Where the dividend is received from another securitisation company, the amount in question

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