Income Tax (Trading and Other Income) Act 2005 section 99

Reverse premiums

Section 99 defines what constitutes a "reverse premium" — essentially an inducement payment made to a tenant or other party to take on a property interest — and sets out the three conditions that must all be met for a payment or benefit to be treated as one.

• A reverse premium is a payment or benefit received as an inducement in connection with a property transaction, where the recipient (or a connected person) acquires an estate, interest or right in or over land.
• The inducement must be paid or provided by the grantor of the land interest, someone connected with the grantor, or someone acting on the grantor's directions — it does not generally cover payments made on an assignment of an interest, unless the assignor is connected with the original grantor.
• All three conditions (A, B and C) must be satisfied, and the payment or benefit must not fall within the exclusions set out in section 100.
• These rules do not apply to reverse premiums received before 1999, and the definition also applies for the purposes of section 311.

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