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HMRC internal manual

Corporate Finance Manual

Other tax rules on corporate finance: securitisation: 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 - CFM72510) and the ‘unallowable purposes test’ (Regulation 12 - CFM72570).

If a company fails to meet these conditions, the special corporation tax charge in Regulation 14 (CFM72580) 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.