(Appendix 2 of the Guidelines for Collateral Practitioners)

Chapter 4 of the 2005 ISDA Collateral Guidelines highlights tax considerations which may affect a firm’s choice of Credit Support Documentation. As a general matter, tax is more likely to be of concern in relation to the title transfer approach reflected in the ISDA Credit Support Annex (Transfer-English Law) or the English law title transfer approach under the 2001 ISDA Margin Provisions (because of the fact that title to the collateral asset has been transferred), although the UK taxation issues have largely been eliminated during the course of bilateral discussions between ISDA and the UK Inland Revenue. Summaries of these discussions were originally included in the Guidelines for Collateral Practitioners in 1998 and have been extracted herein (Appendix 2) for firms’ convenience. Firms should consult with their legal advisors regarding any tax considerations.