Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 832.200

  (1)   A payment gives rise to a hybrid financial instrument mismatch if:

  (a)   the payment gives rise to a * hybrid mismatch under section   832 - 215 or 832 - 230; 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/non - inclusion 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   832 - 325.

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 payment is made under a * structured arrangement.