Section 98 | Tax treatment of reverse premiums

(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).