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

Deduction from taxable total profits where an amount of ordinary income arises late

Section 259LA provides relief where a company's tax deduction was previously reduced under the hybrid mismatch rules, but the recipient later brings the corresponding income into account for tax in a period outside the originally permitted timeframe.

• Where a deduction was previously denied or reduced under the hybrid mismatch rules because the corresponding income was not expected to be taxed within the permitted period, relief is available if that income is subsequently brought into tax by the recipient
• The payer company may deduct an amount equal to the late-arising income from its taxable total profits for the accounting period in which the recipient's late period ends
• Any amount that cannot be deducted in that period may be carried forward and deducted in subsequent accounting periods of the payer
• The total relief given under this section cannot exceed the amount by which the original deduction was reduced under the hybrid mismatch counteraction rules

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