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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: 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 (CFM72680)
  • group relief (CFM72640)
  • intra-group transfers of assets (CFM72650)
  • loan relationships between connected companies (CFM72660)
  • derivative contracts between connected companies (CFM72670)

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.