Commentary

B6.205 Reverse premiums

Business tax
Business tax | Commentary

B6.205 Reverse premiums

Business tax | Commentary

B6.205 Reverse premiums

Particularly during times of economic recession, landlords often offer inducements such as rent-free periods or even make capital payments to their prospective tenants. Any such payment by the landlord is called a 'reverse premium' if it is made in connection with a transaction that gives the recipient (or a person connected with the recipient) an estate, interest or right over land1.

Where the recipient (ie the intended tenant) is entering into the transaction for the purposes of a trade then the reverse premium is treated as a revenue receipt of the trade2.

In other cases, however, the receipt is

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