Another issue for securitisation transactions in UK has been the stamp duty issue. Parties normally contrive to avoid this by executing documents outside the jurisdiction, as the duty is payable at the place where the agreement is executed. However, there is a common stamp law provision that if an agreement executed outside the country but relating to property in the country comes to the country after execution, it will be stampable then. Thus, execution of the agreement outside the country defers the stamp duty implication till it is necessary to bring the document into the country for the purpose of enforcement. Stamp duty relief can also be obtained by a transfer within the group, that is, by estalishing the SPV as a subsidiary of the originator.
Withholding tax is applicable on interest payments.
No withholding tax is charged in case of interest payments to SPVs located in countries with which UK has a double tax avoidance treaty, for example, Netherlands. VAT is not applicable on sale of receivables. The question would, in most cases, be decided by reference to the originator's accounting treatment. In certain cases, the asset being transferred may be held as capital assets - for example, in case of lease transactions. Ideally, in such cases, the physical asset and the receivables therefrom should be split, and the receivables should only be transferred rather than the physical asset.