Taxation (International and Other Provisions) Act 2010 section 259ID

Income for the purposes of section 259IC

Section 259ID defines what counts as "section 259ID income" by setting out four conditions (A to D) that must all be met, and explains how the amount of that income is calculated.

• An investor must make a payment to a hybrid entity that does not generate a tax deduction for the investor (Condition A), and that payment must give rise to taxable ordinary income for the hybrid entity (Condition B).
• The investor's payment to the hybrid entity must be a direct consequence of a payment the investor received from an unrelated third party (Condition C).
• The payment from the unrelated third party must itself give rise to taxable ordinary income for the investor (Condition D).
• The amount of section 259ID income is the lower of the payment the investor made to the hybrid entity and the payment the investor received from the third party.