INTM610140 - Exception Conditions

Arrangements are not Profit Fragmentation Arrangements if either of the two Exception Conditions is met. These are:

• The Tax Mismatch Condition, and
• The Tax Advantage Condition.

The existence of a tax mismatch, or of a tax advantage purpose, will not in itself mean that the arrangements are Profit Fragmentation Arrangements. It is always necessary to consider the interaction between all of the conditions and exception tests before applying any adjustment.