INTM559300 - Hybrids: imported mismatches (Chapter 11): counteraction

If the conditions above are satisfied, then s259KC counteracts the relevant mismatch by reducing the payer바카라 사이트™s deduction in respect of the imported mismatch payment. If there are payments other than the imported mismatch payment that are relevant to the relevant mismatch, the UK payer, P바카라 사이트™s, deduction is reduced by P바카라 사이트™s share of the relevant mismatch, see INTM559310.

If the imported mismatch payment made by P is the only payment made that is relevant to the mismatch payment, then P바카라 사이트™s deduction is reduced by the amount of the relevant mismatch, subject to the limit on the counteraction in s259KE introduced by Finance Act 21, see INTM559310.

The relevant mismatch is defined and calculated under condition D, as discussed at INTM559240. The imported mismatch payment is defined under condition A and is discussed at INTM559210.

Dual Inclusion Income

Reductions under section 259KC have effect subject to section 259KD.

If Condition D at s259KA(6) applies, and it is reasonable to suppose a mismatch arises as a result of any of Chapters 5, 7, 8, 9 or 10, or due to an excessive PE deduction, a counteraction under s259KC is not to exceed the relevant net amount.

The relevant net amount means

  • For mismatches arising under Chapters 5 to 9, it is the amount which could not be deducted from that person바카라 사이트™s income under that chapter (ignoring the effect of any carry-forward provisions in those chapters), or
  • For mismatches arising under Chapter 10, the amount by which the dual territory double deduction of the company for a deduction period exceeds its dual inclusion income for that period, or
  • For excessive PE deductions, the amount by which the excessive PE deduction for the permitted taxable period exceeds its dual inclusion income for that period

Due consideration for the dual inclusion income of the parties to the relevant mismatch should be taken into account, where appropriate. However, this will not extend to considering whether the income of the UK payer is dual inclusion income.

For (b) above, 바카라 사이트˜dual inclusion income바카라 사이트™ means an amount that is both ordinary income of the company for that period for the purpose of a tax charged under the law of one territory, and ordinary income of the company for the purposes of a tax charged under the law of another territory.

For (c) above, 바카라 사이트˜dual inclusion income바카라 사이트™ of a company for a period means an amount that is ordinary income for the purposes of taxes charged in both the parent and PE jurisdictions.