Commentary on Sections Overview Overview Section 99: Arrangements not at arm’s length
384.If a property transaction is not at arm’s length there is a special timing rule. This section provides that the whole of the reverse premium is taxed when the property transaction is entered into. It is based on paragraph 3 of Schedule 6 to FA 1999. The corresponding rule for income tax is in section 102 of ITTOIA.
385.Subsection (1) refers to “connected persons”. That expression is defined for the purpose of this section in section 100.
386.Subsection (5) deals with the case where the recipient enters into a property transaction for the purposes of a trade but the trade has not yet started. In that case, the reverse premium is brought into account when the trade starts.