INTM550550 - Hybrids: definition of key terms: payer and payee

Payer

The payer is a person who would be able to deduct an amount in respect of a payment or quasi-payment when calculating their taxable profits, if Part 6A (or a non-UK equivalent of Part 6A) did not apply.

Payee

A payee is any person to whom

• a payment is made, or
• an amount of ordinary income arises as a result of a payment, or
• an amount of ordinary income arises as a result of a quasi-payment, or
• an amount of ordinary income could reasonably be expected to arise if the relevant assumptions are made. See INTM550540 for details of the relevant assumptions

Payer is also a payee

The payer can also be a payee where the entity is treated as the payer under UK law, but as a separate entity in the other jurisdiction.

For example, a payment made by a partnership to one of the partners has the same payer and payee from a UK perspective.