Hybrids: making sense of the draft guidance

The hybrid mismatch rules have been expanded in scope beyond the original OECD recommendations, but not in any coherent or principled manner: rather, the changes appear to be targeted at specific planning opportunities that would otherwise arise. The recently released guidance fails to offer any more clarity, leading to the suspicion that HMRC is not entirely clear what it is trying to catch. It is hoped that the final guidance, to be released in the spring, will offer more certainty; until then, taxpayers should proceed with caution.