Commentary

D4.725 Imported mismatches

Corporate tax
Corporate tax | Commentary

D4.725 Imported mismatches

Corporate tax | Commentary

Hybrid and other mismatches—anti-avoidance

D4.725 Imported mismatches

There are further provisions that apply to restrict deductions in the UK even when there is no direct hybrid arrangement in the UK. The rules provide that relief can be restricted where the hybrid arrangement is part of a series of arrangements which gives rise to a deductible payment (or accrual) in the UK and which also involve a mismatch arrangement not currently counteracted by the other jurisdictions involved. These provisions are much more wide ranging than the previous anti-arbitrage rules (D4.740 onwards) and it will be necessary to look at the wider transaction and understand the tax treatment of any corresponding receipt.

The qualifying conditions which must all be met for these rules to apply are1:

  1.  

    (a)     a payment or quasi-payment ('the imported mismatch payment') is made under / in connection with

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