C1Part 3Trading income
Chapter 6Trade profits: receipts
Reverse premiums
99Arrangements not at arm's length
1
This section applies if—
a
two or more of the parties to the property arrangements are connected persons, and
b
the terms of those arrangements are not such as would reasonably have been expected if those persons had been dealing at arm's length.
2
The terms of the property arrangements meet the condition in subsection (1)(b) if they differ to a significant extent from the terms which, at the time the arrangements were entered into, would be regarded as normal and reasonable—
a
in the market conditions then prevailing, and
b
between persons dealing with each other at arm's length in the open market.
3
The whole amount or value of the reverse premium brought into account under section 98 is brought into account in the first relevant period of account.
4
“The first relevant period of account” means the period of account in which the property transaction is entered into.
5
However if the recipient enters into the property transaction for the purposes of a trade—
a
which is not then carried on by the recipient, but
b
which the recipient subsequently starts to carry on,
“the first relevant period of account” means the first period of account in which the recipient carries on the trade.
Pt. 3 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 4(1)