832200 When a payment gives rise to a hybrid financial instrument mismatch (1) A payment gives rise to a hybrid financial instrument mismatch if: (a) the payment gives rise to a mismatch under *hybrid section 832215 or 832230; and (b) subsection (3) or (6) applies. Note: As a result of ordering rules in later Subdivisions, a payment that gives rise to a hybrid financial instrument mismatch does not also give rise to a hybrid mismatch under a later Subdivision of this Division. (2) The of the financial instrument deduction component *hybrid mismatch is the component of the *deduction mismatch. *deduction/noninclusion (3) This subsection applies if the following entities are related for the purposes of subsection (4): (a) the entity that made the payment; (b) each entity that is a entity in respect of the income or *liable profits of the recipient of the payment. Note: For the definition of see section 832335. liable entity, Related persons (4) Two entities are related for the purposes of this subsection if any of the following apply: (a) the entities are in the same 832 control group; *Division (b) one of the entities holds a participation interest of 25% *total or more in the other entity; (c) a third entity holds a total participation interest of 25% or more in each of the entities. (5) For the purposes of subsection (4), treat the participation *direct interest of an entity (the in another entity (the holding entity) test as being the sum of the direct participation interests held by entity) the holding entity and its in the test entity. *associates Structured arrangement (6) This subsection applies if the under which the payment is *scheme made is a arrangement. *structured
832200 When a payment gives rise to a hybrid financial instrument mismatch (1) A payment gives rise to a hybrid financial instrument mismatch if: (a) the payment gives rise to a *hybrid mismatch under section 832215 or 832230; and (b) subsection (3) or (6) applies. Note: As a result of ordering rules in later Subdivisions, a payment that gives rise to a hybrid financial instrument mismatch does not also give rise to a hybrid mismatch under a later Subdivision of this Division. (2) The deduction component of the *hybrid financial instrument mismatch is the *deduction component of the *deduction/noninclusion mismatch. (3) This subsection applies if the following entities are related for the purposes of subsection (4): (a) the entity that made the payment; (b) each entity that is a *liable entity in respect of the income or profits of the recipient of the payment. Note: For the definition of liable entity, see section 832335. Related persons (4) Two entities are related for the purposes of this subsection if any of the following apply: (a) the entities are in the same *Division 832 control group; (b) one of the entities holds a *total participation interest of 25% or more in the other entity; (c) a third entity holds a total participation interest of 25% or more in each of the entities. (5) For the purposes of subsection (4), treat the *direct participation interest of an entity (the holding entity) in another entity (the test entity) as being the sum of the direct participation interests held by the holding entity and its *associates in the test entity. Structured arrangement (6) This subsection applies if the *scheme under which the payment is made is a *structured arrangement.
Exposure-Draft-c2018-t268551-1.docx