On 31 March, HMRC published an update to its draft guidance on the hybrid and other mismatches legislation. Whilst the legislation has been in effect from 1 January 2017, the latest draft guidance from HMRC clearly remains a work in progress. Although there are a number of minor changes, those of most significance relate to HMRC’s interpretation restricting the recognition of certain taxes on income, further assurance on the treatment of interest free loans, new sections dedicated to set out HMRC’s interpretation of the phrases ‘reasonable to suppose’ and ‘just and reasonable’, and further clarification on the imported mismatch rules.
