New legislation aimed at reverse premiums

The Government is to enact legislation aimed at stamping out tax evasion through so called "reverse premiums".

The Minister for Finance, Mr McCreevy, said today he intends bringing forward legislation contained in the Finance Bill 2002 "to clarify the tax treatment of reverse premiums".

Reverse premiums are payments made by landlords to prospective tenants in order to induce them to enter into a lease agreement at a rent which is above the market value.

The Minister said the legislation will apply the clarification with effect on and from today.

He said the it has recently come to the attention of the Revenue Commissioners that reverse premiums are being used for tax avoidance purposes and he was acting in light of this to announce his intention to close off these avoidance opportunities with immediate effect.