»Ê¹ÚÌåÓýapp

»Ê¹ÚÌåÓýapp Group Mismatch Scheme (GMS) rules apply to two or more companies within the charge to corporation tax that are members of a group and party to a scheme, where at least one of two conditions (condition A or condition B) is met. »Ê¹ÚÌåÓýappse conditions are either that

• it is practically certain that the scheme will secure a relevant tax advantage, or
• the purpose of the company is to secure a relevant tax advantage.

Where the rules apply to a company, the GMS rules prevent a scheme profit or loss being brought to account as a credit or debit for the purposes of the loan relationship or derivative contracts rules. A scheme profit or loss is one that arises from the scheme and meets either or both of the asymmetry conditions.

»Ê¹ÚÌåÓýapp GMS rules require the economic profits or losses of all the scheme participants to be calculated taking into account profits and losses made as a result of the provisions of the Corporation Tax Acts, and assuming that the group has tax capacity to benefit from scheme losses.

Where a mismatch is produced, without two different companies being involved, the provisions of the tax mismatch legislation may apply instead of group mismatch. This may apply, for example, where a mismatch is between a company and a partnership of which the company is a member (CFM 77700).

»Ê¹ÚÌåÓýapp terms used in, and the application of, the legislation are explained in more detail as follows:

CFM77530 to CFM77540	explain the two conditions, condition A and condition B, one of which must be met for the legislation to apply
CFM77550	explains the terms used in the legislation - ‘scheme�, ‘scheme profit or loss�
CFM77560 to CFM77570	explain the asymmetry conditions
CFM77580	explains the meaning of ‘relevant tax advantage�
CFM77590	explains the meaning of ‘scheme period�
CFM77600	explains the meaning of ‘group�
CFM77610	explains the meaning of ‘economic profit or loss�
CFM77620 to CFM77630	explains the meaning of ‘tax capacity�