INTM557060 | Hybrids: hybrid entity double deduction mismatches (Chapter 9): counteraction

If conditions A to C of s259IA are met the mismatch is countered by restricting the amount of the deduction in the UK.

The hybrid entity double deduction mismatch requires either the hybrid entity or an investor in the hybrid entity to be within the charge to UK corporation tax for the relevant deduction period. The counteraction then applies to reduce the allowable deduction available to that person by the amount that it is reasonable to suppose could be deducted twice.

Any counteraction is mitigated to the extent that the deduction may be set against any dual inclusion income in the relevant deduction period.