SDLTM28110 - Reliefs: Alternative property finance

Land sold to a financial institution and leased to a person: England & Northern Ireland: Detailed rules FA03/S71A(1) and FA03/S71A(5)

To take advantage of this relief arrangements must be entered into between a person and a financial institution whereby the financial institution

• purchases a major interest or an undivided share of a major interest in land - the first transaction.

If an undivided shared of the major interest is purchased, the major interest must be held in trust for the financial institution and the person as beneficial tenants in common

• grants the person a lease if a freehold has been acquired, or a sublease if a leasehold has been acquired, out of the major interest purchased - the second transaction.

If an undivided share in the major interest was purchased the trustees grant the lease or sub-lease

• enters into an agreement where the person has a right to require the institution, or its successor in title, to transfer that major interest purchased - further transactions.

This can be in one transaction or in a series of transactions

FA03/S71A(5) provides that the further transactions are not to be treated:

• as substantially performed by taking possession or paying a substantial amount of the consideration, unless and until the whole interest purchased by the institution under the first transaction has been transferred, so disapplying FA03/S44(5)
• as the grant of an option to which FA03/S46 applies

This subsection disapplies various provisions which may have effect.

It ensures that, where the arrangements are completed in the manner provided for, and allthe other rules are complied with, only one stamp duty land tax charge is payable.