Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p15
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 15/38)
Character Range: 7415855–7418665

mismatch is a design feature of a scheme under which the payment is made.
 (2) The question whether a *hybrid mismatch is a design feature of a *scheme must be determined by reference to the facts and circumstances that exist in connection with the scheme, including the terms of the scheme.
 (3) An entity that entered into or carried out the *scheme or any part of the scheme is a party to the *structured arrangement unless:
 (a) the entity could not reasonably have been expected to be aware that the scheme gave rise to a *hybrid mismatch; and
 (b) no other entity in the same *Division 832 control group as the entity could reasonably have been expected to be aware that the scheme gave rise to a hybrid mismatch; and
 (c) the financial position of each entity in the Division 832 control group would reasonably be expected to have been the same if the scheme had not given rise to the hybrid mismatch.

832‑215  Hybrid mismatch
 (1) A payment gives rise to a hybrid mismatch if:
 (a) the payment is made under any of the following:
 (i) a *debt interest;
 (ii) an *equity interest;
 (iii) a *derivative financial arrangement;
 (iv) an *arrangement covered by subsection (2); and
 (b) the payment might reasonably be expected to give rise to a *deduction/non‑inclusion mismatch; and
 (c) the mismatch that might reasonably be expected to arise, or a part of that mismatch, meets a hybrid requirement in section 832‑220 or 832‑225.

Transfers of financial instruments
 (2) An *arrangement is covered by this subsection if:
 (a) the arrangement is any of the following:
 (i) a reciprocal purchase agreement (otherwise known as a repurchase agreement);
 (ii) a securities lending arrangement;
 (iii) a similar arrangement; and
 (b) an entity acquires any of the following under the arrangement:
 (i) a *debt interest;
 (ii) an *equity interest;
 (iii) a *derivative financial arrangement.

Amount of the hybrid mismatch
 (3) The amount of the *hybrid mismatch is:
 (a) the amount of the *deduction/non‑inclusion mismatch, unless paragraph (b) applies; or
 (b) if only a part of the deduction/non‑inclusion mismatch meets a hybrid requirement mentioned in paragraph (1)(c)—the amount of that part of the deduction/non‑inclusion mismatch.

832‑220  Hybrid requirement—payments under financial instruments
 (1) A *deduction/non‑inclusion mismatch, or a part of such a mismatch, meets the hybrid requirement in this section if:
 (a) the payment that gives rise to the mismatch is made under any of the following:
 (i) a *debt interest;
 (ii) an *equity interest;
 (iii) a *derivative financial arrangement; and
 (b) the mismatch, or the part of the mismatch, is attributable to differences in the treatment of the debt interest, equity interest or derivative financial arrangement, arising from the terms of the