Part 3

Trading income
Chapter 6

Trade profits: receipts

Reverse premiums

Tax treatment of reverse premiums
98
1
A reverse premium is treated for corporation tax purposes as a receipt of a revenue nature.
2
If the recipient enters into the property transaction for the purposes of a trade carried on (or to be carried on) by the recipient, the reverse premium is brought into account in calculating the profits of the trade.
3
If subsection (2) does not apply, the reverse premium is charged to corporation tax in accordance with section 250 (reverse premium taxed as property business receipt).
Pt. 3 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 4(1)