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INTM561710 | Hybrids: operational guidance: when does the legislation take effect

From HM Revenue & Customs · International Manual

Part 6A of the Taxation (International and Other Provisions) Act 2010 was introduced by section 66/Schedule 10 of Finance Act 2016 (FA 16) and has effect from 1 January 2017. The commencement provisions for chapters 3 to 11 are set out at paragraphs 18 to 22 of Schedule 10, FA 16.

Broadly speaking, the legislation applies from 1 January 2017 for

  • deduction/non-inclusion mismatches arising from deductions made on or after that date

  • deduction/non-inclusion mismatches arising from quasi-payments in a payment period beginning on or after that date

  • double deduction mismatches for accounting periods beginning on or after that date

  • imported mismatch payments arising from payments made on or after that date

  • imported mismatch payments arising from quasi-payments in a payment period beginning on or after that date

There are transitional rules for payment periods and accounting periods that begin before 1 January 2017 and end after that date at paragraphs 23 and 24 of Schedule 10, FA 16.

In these cases, the payment/accounting period is treated as 2 separate taxable periods

  • one ending on 31 December 2016, and

  • the other beginning on 1 January 2017

Apportion amounts to each of these period is on a time basis, unless that produces a result that is unjust or unreasonable. In those circumstances, apportion the amounts on a just and reasonable basis.

Transactions between 16 March 2005 to 31 December 2016 involving hybrids and mismatches fall within the arbitrage rules set out at INTM590000 onwards.

Hybrid and other mismatches

The guidance in relation to Part 6A of Taxation (International and Other Provisions) Act 2010 is set out at INTM550000.

Previous drafts of this guidance remain available in the National Archives on gov.uk.

Any queries or comments in relation to this guidance should be referred to the Base Protection Policy team, BAI

HM Revenue and Customs

Business Assets and International

Base Protection Policy Team

S1715, Floor 9, Mail Point 3

Central Mail Unit

Newcastle

NE98 1ZZ