There is no express statutory provision in respect of the tax treatment of the payer of a reverse premium. Therefore, general principles apply.

Payment on grant of lease

In the case of a landlord who holds his interest (out of which he is granting a lease and making an inducement payment to his incoming tenant) as an investment, and who therefore carries on (or will in granting the lease be carrying on) a property rental business within CTA 2009, Pt. 4, Ch. 3, the payment will, or may be, a payment of a capital nature (that it will be is certainly the published view of HMRC, see HMRC’s Business Income Manual, at BIM41060).

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