CFM20560 - Securitisation: taxation: periods beginning on or after 1 January 2007: the regulations: the corporation tax charge: the ‘specified amount’

The ‘specified amount’ under Regulation 14(3)

There is one further amount that may be added to the corporation tax charge. CFM20620 explains that the loan relationship and derivative contracts rules are amended so that any profit or loss on the disposal of a loan relationship or derivative contract intra-group is taxed on the originator company where the disposal is to a securitisation company. This is achieved by disapplying the rules in FA96/SCH9/PARA12 and FA02/SCH26/PARA28.

Where such a transfer took place before the commencement of the securitisation regime, FA96/SCH9/PARA12 or FA02/SCH26/PARA28 may have already applied on a disposal to a securitisation company. An ‘exit charge’ under FA96/SCH9/PARA12A or FA02/SCH26/PARA30A may therefore arise on the securitisation company in respect of one of these disposals. This rule therefore ensures that any charge under FA96/SCH9/PARA12A or FA02/SCH26/PARA30A is added to the taxable profits calculated under regulation 14.