CFM20480 - Securitisation: taxation: periods beginning on or after 1 January 2007: the regulations: conditions to be met by securitisation companies

Specified regulations

Regulations 11 and 12 contain conditions that must be met by all ‘securitisation companies’ (as defined in Regulations 4 to 10). These are the ‘payments condition’ (Regulation 11 – CFM20490) and the ‘unallowable purposes test’ (Regulation 12 – CFM20540).

If a company fails to meet these conditions, the special corporation tax charge in Regulation 14 ( CFM20550) does not apply to it, nor do the modifications to the corporation tax rules set out in Regulations 15 to 20. A company that fails to meet either the payments condition or the unallowable purposes test will still be a ‘securitisation company’ (unless it also falls outside the scope of the definitions in Regulations 4 to 10). But it will not be taxed in accordance with Regulation 14.