I take it that the Deputy is referring to securitisation special purpose vehicles (SPVs). Securitisation SPVs are as a general rule unaffiliated in terms of their ownership structure. It is an essential function of these SPVs that they are not owned by the originating institution; this allows the investor to rely on the asset within the SPV, and protects the investor from any risk of exposure to the originating institution.
As these SPVs are not in the ownership of the originating institution it is a normal feature that they would be held by a charitable trust structure, established for the purpose of holding the equities in the SPV.
I am advised by the Revenue Commissioners that they are aware that in a typical securitisation transaction it is common practice for the shares in the SPV to be owned by a charitable trust. The Revenue Commissioners are not aware of the number of such trusts nor the contribution that such trusts make to charities. These trusts are not within the exempt charity regime, and are chargeable to tax under the normal rules relating to trusts.
The taxation of securitisation companies is governed by section 110 Taxes Consolidation Act 1997. Such companies are charged to corporation tax at 25%. The normal rate of tax for trading companies is 12.5%. There are 1,057 companies which have notified the Revenue Commissioners that they qualify for treatment under Section 110.
Appropriate company law and other provisions apply to these structures, and the institutions arranging and originating the SPVs are generally regulated by the Financial Regulator or its equivalent in other jurisdictions.
