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HMRC internal manual

Business Income Manual

Specific receipts: reverse premiums: contents

A reverse premium is a payment or other benefit received as an inducement to take on a lease or other interest in land. A reverse premium is treated for Income Tax and Corporation Tax purposes as a receipt of a revenue nature. If the transaction is entered into for the purposes of a trade, the reverse premium is a trade receipt. Otherwise, it is a receipt of a property business. The guidance on reverse premiums is arranged as follows.