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Securitisation of assets.
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31.—(1) In this section—
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“qualifying asset” means a loan made by a company (hereafter in this section referred to as “the original lender”) on the security of a mortgage of a freehold or leasehold estate or interest in the ordinary course of a trade carried on by it which consists of or includes the lending of money on such security;
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“qualifying company” means a company resident in the State which carries on a business of the management of qualifying assets which it acquired from the original lender or original lenders, as the case may be, and does not carry on any other business:
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Provided that a company shall not be a qualifying company if any transaction is carried out by it otherwise than by way of a bargain made at arm's length.
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(2) For the purposes of the Tax Acts—
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(a) activities carried out in the course of a business carried on by a qualifying company shall be deemed to be activities carried out in the course of a trade, the profits or gains of which are chargeable to tax under Case I of Schedule D,
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(b) there shall be deducted as an expense of the trade the amount, in so far as it is not—
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(i) otherwise deductible, or
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(ii) recoverable from the original lender or under any insurance, contract of indemnity or otherwise howsoever,
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of any debt which is proved to the satisfaction of the inspector to be bad and of a doubtful debt to the extent that it is estimated to be bad:
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Provided that the amount of the debt shall not be deducted under this paragraph unless it would have been deductible as an expense of the trade of the original lender if that debt had been proved or estimated to be bad before it was acquired by the qualifying company, and
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(c) where at any time an amount, or part of an amount, which has been deducted as an expense under paragraph (b) is recovered or is no longer estimated to be bad, the amount which has been so deducted shall, in so far as it is recovered or is no longer estimated to be bad, be treated as trading income of the trade at that time.
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