INTM550650 - Hybrids: definition of key terms: structured arrangements

Where there is a payment, quasi-payment, arrangement or transfer to which the hybrid mismatch rules would otherwise apply and the control/related persons tests are not met, one has to consider whether the payment, quasi-payment, arrangement or transfer is made under a structured arrangement.

The financial instrument, hybrid transfer arrangement, or arrangement is a structured arrangement if it is reasonable to suppose that

• the financial instrument, hybrid transfer arrangement, or arrangement is designed to secure a hybrid or otherwise impermissible deduction/non-inclusion or double deduction mismatch, or
• the terms of the financial instrument, hybrid transfer arrangement, or arrangement share the economic benefit of the mismatch between the parties to the arrangement or otherwise reflect the fact that the mismatch is expected to arise

The structured arrangement test is a fact dependent test. Further examples of this are included in INTM551115.