Corporation Tax Act 2009 section 96

Reverse premiums

Section 96 defines what constitutes a "reverse premium" — an inducement payment made to a company to take on an interest in land, such as a lease.

• A reverse premium is a payment or benefit received by a company as an inducement to enter into a property transaction involving land
• Three conditions must all be met: the company must receive the inducement (Condition A), the transaction must grant an estate, interest or right in or over land (Condition B), and the payment must come from the grantor or someone connected with or acting for the grantor (Condition C)
• The rules generally apply to the grant of an interest in land rather than an assignment, although an assignment can be caught where the assignor is connected with the original grantor
• Certain reverse premiums are excluded under section 97, and the rules do not apply to reverse premiums arising before 1999