Tax treatment of receipts by way of reverse premiumU.K.
2(1)A reverse premium shall be regarded for [F1corporation tax purposes] as a receipt of a revenue nature.U.K.
(2)Where the relevant transaction is entered into—
(a)by [F2the company receiving the reverse premium] , and
(b)for the purposes of a trade, profession or vocation carried on or to be carried on by [F3that company] ,
the reverse premium shall be taken into account in computing the profits of that trade, profession or vocation under Case I or II of Schedule D.
(3)If sub-paragraph (2) does not apply, [F2the company receiving the reverse premium] is chargeable to [F4corporation tax] as if it were a receipt of a transaction entered into by [F5the company] for the exploitation, as a source of rents or other receipts, of an estate, interest or right in or over the land in question.
Textual Amendments
F1Words in Sch. 6 para. 2 substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 509(3)(a) (with Sch. 2)
F2Words in Sch. 6 para. 2 substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 509(3)(b) (with Sch. 2)
F3Words in Sch. 6 para. 2 substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 509(3)(c) (with Sch. 2)
F4Words in Sch. 6 para. 2 substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 509(3)(d) (with Sch. 2)
F5Words in Sch. 6 para. 2 substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 509(3)(e) (with Sch. 2)