INTM559270 - Hybrids: imported mismatches (Chapter 11): conditions to be satisfied: condition G

Condition G of S259KA asks whether

• the UK payer of the imported mismatch payment is in the same control group as a payee (or, in respect of an excessive PE deduction, the company with the PE), in relation to the mismatch payment, at any time from when the over-arching arrangement (see INTM559230) is made to the last day of the payment period in relation to the imported mismatch payment (see INTM559210), or
• the arrangement is a structured arrangement

Condition G was amended by Finance Act 2021. For payments made before the date of Royal Assent of the Finance Bill, or in the case of quasi-payments, to payment periods beginning before the date of Royal Assent, the condition requires the payer, P, to be in the same control group as a payee or the payer, as opposed to just a payee as is the case post the Finance Act 21 amendment.

Control groups

Control groups are defined at s259NB. More detailed guidance on control groups is at INTM550610.

Structured arrangement

An arrangement is a structured arrangement if it is reasonable to suppose that

• it is designed to secure a hybrid payer deduction/non-inclusion mismatch, or
• the terms of the arrangement share the economic benefit of the mismatch between the parties to that arrangement, or the terms of the arrangement otherwise reflect an expected mismatch

An arrangement designed to secure a commercial or other objective may also be designed to secure a hybrid payee deduction/non-inclusion mismatch. When considering this issue, the test is whether it is reasonable to suppose that the arrangement was designed to secure the mismatch, regardless of any other objective.