Commentary on Sections Overview Overview Section 102: Arrangements not at arm’s length
415.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.
416.Subsection (1) refers to “connected persons”. That expression is defined for the purpose of this section in section 103.
417.Subsection (5) deals with the case where the recipient enters into a property transaction for the purpose of a trade but the trade has not yet started. In that case, the reverse premium is brought into account when the trade starts.