On March 11, a tax bill containing proposals to increase the trust tax rate to 39% was reported back by the Finance and Expenditure Select Committee. The Committee accepted the ASF’s submission that securitisation trusts should be excluded from a proposed rule that would tax trust distributions to closely held companies at 39%. This rule could have resulted in over taxation of securitisation trusts established by closely held sponsors and potentially impacted tax neutrality of these structures.
The ASF also submitted that there should be a 28% rate for securitisation trusts more generally, and that certain other remedial tax changes should be made to facilitate securitisation. These other submissions were not adopted in the reported back version of the bill, but could be the subject of future reform now that the legislation has a statutory definition of securitisation trust to build from.
The ASF’s submission can be found here, and the Departmental Report to the Committee here.