CFM20590 - Securitisation: taxation: periods beginning on or after 1 January 2007: the regulations: modifications to other tax rules

Modifications to other tax rules

A number of corporation tax rules are ‘switched off’ in relation to companies taxed under Regulation 14. These are set out in Regulations 16 to 20 and are

• distributions ( CFM20650)
• group relief ( CFM20600)
• intra-group transfers of assets ( CFM20610)
• loan relationships between connected companies ( CFM20620)
• derivative contracts between connected companies ( CFM20630)

It should be borne in mind that a company becomes a ‘securitisation company’ solely by satisfying one of the sets of conditions in regulations 5 to 9.  However, it will only be taxed under the regulations if it complies with the payments condition and the unallowable purposes test. So a company can still be a ‘securitisation company’ and be taxed under normal corporation tax charging provisions. The various provisions that are disapplied in relation to a company taxed under regulation 14 are not disapplied where the company is taxed under normal CT rules.