BIM64175 | Private Finance Initiative (PFI): contribution of land: reverse premiums

S96-S100, S250 Corporation Tax Act 2009

The reverse premiums legislation charges ‘a payment or other benefit by way of an inducement’ to take an interest in land (see BIM41050 onwards).

In some PFI projects the public sector purchaser grants a lease, to the private sector operator, of the land on which the operator will construct the PFI property. In addition the purchaser may make a contribution of money, or money’s worth (e.g. surplus land) as part of the commercial arrangement.

In such circumstances we do not consider that the contribution is an inducement for the purposes of the reverse premium legislation.