SDLTM28100 - Reliefs: Alternative property finance

Land sold to a financial institution and leased to a person: England & Northern Ireland: General overview FA03/S71A

Relief is available where there are arrangements under which:

• a financial institution purchases a property, or a financial institution and the person do so in common
• the property is leased to the person over an agreed term
• at the end of the term the reversion is transferred to that person

there may or may not be provision for shares in the freehold to be transferred to the person in stages during the term.

Provided the statutory conditions are fulfilled the lease, the transfer of the reversion and any intermediate transfers of shares in the freehold are relieved from stamp duty land tax. This means that the stamp duty land tax consequences are the same as for a conventional mortgage product.

In addition the initial purchase is relieved from stamp duty land tax if the vendor is the person or a financial institution which already held the property under the above type of arrangements with the person. This means that the stamp duty land tax consequences are the same as for a conventional re-mortgage.