INTM561110 - Hybrids: other provisions - adjustments in light of subsequent events: overview
Chapter 12 of Part 6A TIOPA 2010 provides for compensatory adjustments where an amount has been counteracted under another chapter within Part 6A, but in the light of subsequent events it becomes apparent that the counteraction was unwarranted or excessive.
S259L (see INTM561120) applies where a counteraction is applied under Part 6A but the understanding upon which that counteraction was based subsequently turns out to be incorrect, so that either no mismatch arises, or the mismatch is smaller than that originally calculated. Such adjustments as are just and reasonable may be made in these circumstances.
S259LA (see INTM561130) applies where a deduction arising from a payment or quasi-payment is reduced by application of Chapters 3, 4, 7 and 8, and the only reason for the reduction is that the ordinary income arose to the payee outside the permitted period. If an amount of ordinary income subsequently arises in a later period, an amount equal to the amount of that ordinary income, but no more than the reduction of the allowable deduction, may be deducted in calculating the taxable profits of the payee for that later period.