This relief is provided by the provisions of schedule 7 to the LBTT(S)A 2013.
Where alternative property finance arrangements are used to finance an acquisition, to avoid taxing the transaction more than once, relief from LBTT is available where one of three different sets of alternative property finance arrangements is in place:
- where a financial institution buys a property (the first transaction), then leases or sub-leases it to a person (the second transaction) and agrees that at the end of that term it will transfer the property to that person (the third transaction) - see LBTT3018;
- where a financial institution and person purchase a property as owners in common - see LBTT3019; or
- where a financial institution purchases a property and re-sells it to a person, the person borrows some or all of the purchase price from the financial institution and grants a mortgage to the financial institution over that property - see LBTT3020.
For the purposes of this relief:
- ‘Financial institution’ has the meaning given by section 564B of the Income Tax Act 2007, omitting section 564B(1)(d);
- ‘Arrangements’ include any agreements, understanding, scheme, transaction or series of transactions whether these are legally enforceable or not; and
- references to a person are to be read (in relation to times after the death of the person concerned) as references to the person’s personal representatives.