Section 98 — Corporation Tax Act 2009: Tax treatment of 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).