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Reverse premium in hands of tenant - taxable?

Is the receipt of a reverse premium payment taxable on a tenant?

My client is a private individual and has received a reverse premium payment from his landlord.

The receipt is not for business purposes at all and relates purely to a residential property.

My first thought is that this would be subject to CGT, but would appreciate the forum's thoughts on this. I also believe that in time, the sum would have an IHT effect too, but that is not my immediate concern.

I have posted anonymously as this is highly sensitive.

Thanks, Premium

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By DJKL
21st Jan 2018 13:56

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim41050

Not sure it is capital, see above link and quote below. Highly unusual, are you sure it is a premium? What term lease? Any connection between parties?

"A reverse premium is a payment or other benefit received as an inducement to take on a lease or other interest in land. A reverse premium is treated for Income Tax and Corporation Tax purposes as a receipt of a revenue nature. If the transaction is entered into for the purposes of a trade, the reverse premium is a trade receipt. Otherwise, it is a receipt of a property business."

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