Corporation Tax Act 2009 section 250

Reverse premiums

Section 250 sets out how reverse premiums received by a company are taxed as receipts of a property business where they are not already taxed as trading income.

• A reverse premium not already taxed as a trade receipt is treated as a receipt of the company's property business, even if the company does not already carry on a property business
• The premium is classified as UK property business income or overseas property business income depending on where the land is situated
• Where connected persons are involved and the terms are not at arm's length, the full amount of the reverse premium must be recognised in the accounting period in which the property transaction takes place
• This section does not apply to reverse premiums received before 9 March 1999