Commentary on Sections Overview Overview Section 250: Reverse premiums
902.This section sets out the rules for taxing reverse premiums as receipts of a property business. It is based on Schedule 6 to FA 1999. The corresponding rule for income tax is in section 311 of ITTOIA.
903.Subsection (1) refers to a “reverse premium”. In accordance with subsection (6) that expression has the same meaning as in section 96. So this section applies to reverse premiums excluding any of the “excluded cases” within section 97. The subsection also excludes any reverse premium that is charged to tax as a trade receipt by section 98.
904.Subsections (2) and (3) bring the reverse premium within the scope of the property income rules as United Kingdom or overseas property business even if the recipient is not already carrying on a property business.
905.Schedule 2 to this Act rewrites the transitional provision in section 54(2) of FA 1999. This section does not apply to pre 9 March 1999 reverse premiums.