S102, S103, S311(4) Income Tax (Trading and Other Income) Act 2005, S99, S100, S250(4) Corporation Tax Act 2009

Connected parties might create extremely long leases and spread the reverse premium over an unrealistically long period. For example, a group property company might pay a reverse premium to a group trading company as an incentive to lease trading premises for 99 years without any provision for rent reviews. The trading company could then claim that GAAP required it to spread the receipt over 99 years, rendering the tax effect trifling.

In order to discourage this kind of arrangement, special timing rules apply where:

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