- Latest available (Revised)
- Point in Time (06/04/2010)
- Original (As enacted)
Point in time view as at 06/04/2010.
Corporation Tax Act 2009, Cross Heading: Reverse premiums is up to date with all changes known to be in force on or before 01 September 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
Changes and effects yet to be applied by the editorial team are only applicable when viewing the latest version or prospective version of legislation. They are therefore not accessible when viewing legislation as at a specific point in time. To view the ‘Changes to Legislation’ information for this provision return to the latest version view using the options provided in the ‘What Version’ box above.
(1)For the purposes of sections 98 and 99 a payment or other benefit is a reverse premium if—
(a)conditions A, B and C are met, and
(b)it is not excluded by section 97.
(2)Condition A is that a company (“the recipient”) receives the payment or other benefit by way of inducement in connection with a transaction being entered into by—
(a)the recipient, or
(b)a person connected with the recipient.
(3)Condition B is that the transaction (the “property transaction”) is one under which—
(a)the recipient, or
(b)the person connected with the recipient,
becomes entitled to an estate, interest or right in or over land.
(4)Condition C is that the payment or other benefit is paid or provided by—
(a)the person (“the grantor”) by whom the estate, interest or right is granted or was granted at an earlier time,
(b)a person connected with the grantor, or
(c)a nominee of, or a person acting on the directions of, the grantor or a person connected with the grantor.
(1)A payment or other benefit is not a reverse premium so far as it is brought into account under section 532 of CAA 2001 (the general rule excluding contributions) to reduce the recipient's expenditure qualifying for capital allowances.
(2)A payment or other benefit received in connection with a property transaction is not a reverse premium if—
(a)the person entering into the transaction is an individual, and
(b)the transaction relates to premises occupied or to be occupied by the individual as the individual's only or main residence.
(3)A payment or other benefit is not a reverse premium so far as it is consideration for the transfer of an estate or interest in land which constitutes the sale in a sale and leaseback arrangement.
(4)A “sale and leaseback arrangement” means any such arrangement as is described in [F1section 681AA(1) or (2) or 681AB(1) or (2) of ITA 2007 or] [F2section 835(1) or (2), 836(1) or (2) or 850 of CTA 2010].
Textual Amendments
F1Words in s. 97(4) inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 263 (with Sch. 9 paras. 1-9, 22)
F2Words in s. 97(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 596 (with Sch. 2)
(1)A reverse premium is treated for corporation tax purposes as a receipt of a revenue nature.
(2)If the recipient enters into the property transaction for the purposes of a trade carried on (or to be carried on) by the recipient, the reverse premium is brought into account in calculating the profits of the trade.
(3)If subsection (2) does not apply, the reverse premium is charged to corporation tax in accordance with section 250 (reverse premium taxed as property business receipt).
(1)This section applies if—
(a)two or more of the parties to the property arrangements are connected persons, and
(b)the terms of those arrangements are not such as would reasonably have been expected if those persons had been dealing at arm's length.
(2)The terms of the property arrangements meet the condition in subsection (1)(b) if they differ to a significant extent from the terms which, at the time the arrangements were entered into, would be regarded as normal and reasonable—
(a)in the market conditions then prevailing, and
(b)between persons dealing with each other at arm's length in the open market.
(3)The whole amount or value of the reverse premium brought into account under section 98 is brought into account in the first relevant period of account.
(4)“The first relevant period of account” means the period of account in which the property transaction is entered into.
(5)However if the recipient enters into the property transaction for the purposes of a trade—
(a)which is not then carried on by the recipient, but
(b)which the recipient subsequently starts to carry on,
“the first relevant period of account” means the first period of account in which the recipient carries on the trade.
For the purposes of this section and sections 96 to 99—
(a)persons are treated as connected with each other if they are connected at any time during the period when the property arrangements are entered into, and
(b)“the property arrangements” means the property transaction and any arrangements entered into in connection with it (whether before it, at the same time as it or after it).
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.
Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.
Point in Time: This becomes available after navigating to view revised legislation as it stood at a certain point in time via Advanced Features > Show Timeline of Changes or via a point in time advanced search.
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.
Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.
Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:
Click 'View More' or select 'More Resources' tab for additional information including: