A fund was investing in the renewables sector and had modelled its future cashflows as well as its tax deductibility position on interest.

The buyer sought protection for historic tax deductions claimed by the target group but the seller was an individual and the buyer wanted a stronger financial covenant in the event the deductions were challenged. They also wanted certainty on the future deductibility position going forward so as to model their cashflows accurately.

We issued two policies: one for the historic risk of a challenge on the interest deductibility and the other provided cover for future deductibility over a five-year term to give the fund the certainty required.