THE CIS AND EXEMPTIONS
The two most commonly encountered exemptions from the CIS are:
Regulation 20: the payment of a reverse premium (e.g. a cash lump sum paid by a landlord to a tenant as an inducement to enter into a lease) is not a contract payment. Such payments may often be referred to as "capital contributions", and analysis will be required to ascertain if such a payment comprises a reverse premium for CIS purposes.
Regulation 22: broadly has the effect that payments made by a deemed contractor in respect of property used for its business fall outside the CIS, e.g. a payment made by a supermarket tenant to a third party sub-contractor in respect of the construction of a new supermarket. However, Regulation 22 does not apply if the property is held as an investment by the deemed contractor, e.g. a payment by the owner of a shopping centre which is held by the owner as an investment to a third party sub-contractor to build an extension to the centre.
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