835AO Withholding tax mismatch outcome

Summary

This section sets out what is meant by withholding tax mismatch outcome and provides the rule to neutralise such an outcome.

Details

(1) Withholding tax mismatch outcome

A withholding tax mismatch outcome shall arise where—

1. an entity enters into a hybrid transfer (as defined in Chapter 4), and
2. it is reasonable to consider that the purpose of the hybrid transfer is to secure relief for more than one party to the hybrid transfer in respect of an amount of withholding tax.

(2) The rule for neutralising a withholding tax mismatch outcome

A withholding tax mismatch outcome shall, notwithstanding anything in Schedule 24 to the contrary, be neutralised by reducing the withholding tax relief available by the following fraction—

A/B

where—

A is the taxable profit from the hybrid transfer arising to the entity, and

B is the gross income of the entity under the hybrid transfer.

Relevant Date: Finance Act 2021