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HMRC internal manual

Corporate Finance Manual

Other tax rules on corporate finance: securitisation: periods beginning on or after 1 January 2005: the interim regime: the note-issuing company

Note-issuing company

The note issuing company is the company that issues notes to the investors. It is the key company in the securitisation tax rules. The other four types of securitisation company (CFM72240) are defined by their relationship to it.

The note-issuing company must satisfy the following conditions:

  • it must be party as debtor to a capital market investment (CMI);
  • the securities in that CMI must be issued wholly or mainly to independent persons;
  • the CMI must be part of a capital market arrangement (CMA), and amount to at least £50m;
  • any business the note-issuing company carries on must be that of acquiring, holding and managing the assets or acting as guarantor for such assets.

The definition is very similar to that of a note-issuing company in the permanent regime, and the guidance at CFM72380 onwards should be referred to in point of interpretation. The key differences are that the assets in question are not restricted to ‘financial assets’ (CFM72350), and their total value must be at least £50m rather than £10m. The same principles apply to the £50m threshold as to the £10m threshold in the permanent regime.