MTT10030 - Scope: Domestic Top-up Tax - Excluded entities

Entities excluded for MTT purposes (see MTT10210) are also excluded for DTT purposes. However, there are some additional rules for DTT. These are set out in section 267 and 267A of Finance (No.2) Act 2023.

Qualifying transformer vehicles

For wholly-domestic groups and entities, a qualifying transformer vehicle (see MTT10140) will be an excluded entity (for DTT purposes only).

Qualifying asset holding companies

For wholly-domestic groups and entities, a qualifying asset holding company for the purposes of Schedule 2 to Finance Act 2022 is an excluded entity (for DTT purposes only).

This applies only for periods beginning on or after 31 December 2024, unless a retrospection election has been made (see MTT09490), in which case it will also apply for prior periods.

Securitisation companies

A securitisation company that is a single entity is an excluded entity, for DTT purposes only.

A securitisation company that is a member of a group is treated as not being a member of the group, except for the purpose of the revenue threshold test. This means the revenue of the securitisation company will still be included when applying the revenue threshold test to the group.

‘Securitisation company’ is defined in regulation 4 of the Taxation of Securitisation Companies Regulations 2006.

Investment entities – wholly domestic groups and entities

For wholly domestic groups and entities, an investment entity is an excluded entity for DTT purposes.

Investment entities – multinational groups

For multinational groups, an investment entity is not a qualifying entity, but is still treated as member of the group under DTT for the purposes of:

  • determining its top-up amount, and whether that amount is to be attributed to another member of the group, and
  • assessing whether the group meets the revenue threshold for DTT purposes (see MTT11030).

For any other purpose, including chargeability, an investment entity is treated under DTT as not being a member of a group.

See MTT45210 for further guidance on investment entities in DTT.

Treatment of excluded entities

Where an entity is excluded for DTT purposes, it will be treated as not being a member of any group, except for the purposes of determining whether the group meets the revenue threshold (see MTT11030).