Corporation Tax Act 2009 section 246

Provisions about premiums

Section 246 sets out the rules for determining when a payment made in connection with the granting of a tenancy is treated as a premium, and how premiums may be attributed between linked leases.

• Any sum paid on or in connection with granting a tenancy is presumed to be a premium unless it is rent or other sufficient consideration can be shown
• The term "sum" is broadly defined to include the value of any consideration, not just cash payments
• Where two leases are linked under Rule 3 of section 243 (effective duration of lease rules), a premium paid for one lease may be treated as having been required under the other
• The burden falls on the payer to demonstrate that a payment is not a premium, by showing that adequate consideration other than the granting of the tenancy was given