167Underlying profits of hybridsU.K.
(1)This section applies where a member of a multinational group (“M”)—
(a)is not regarded as tax transparent in the territory in which it is located, and
(b)is regarded as tax transparent in a territory in which a member of the group with an ownership interest in it (“G”) is located.
(2)Where—
(a)the adjusted profits of G reflect profits of M, and
(b)the basis for the profits of M being so reflected is that M (along with any other entities through which G holds that interest) is regarded as tax transparent in the territory in which G is located,
such profits as are reflected on that basis are to be allocated to M (and included in the adjusted profits of M to the extent not already included) and excluded from the adjusted profits of G.