The Government Alternative Finance Arrangements Regulations 2014

Available arrangements

3.—(1) Alternative finance arrangements which comply with the conditions specified in this regulation are available to the Treasury for raising money.

(2) Condition 1 is that a relevant person and a company enter into arrangements under which—

(a) the relevant person transfers to the company a qualifying interest in land; and

(b) the relevant person and the company agree that when the interest ceases to be held by the company as mentioned in paragraph (3)(b), the company will transfer the interest to the relevant person.

(3) Condition 2 is that—

(a) the company, as bond-issuer, enters into a bond (whether before or after entering into the arrangements mentioned in paragraph (2)); and

(b) the interest in land to which the arrangements mentioned in paragraph (2) relate is held by the company as a bond asset.

(4) Condition 3 is that, for the purpose of generating income or gains for the bond, the company and a relevant person enter into a leaseback agreement.

(5) For the purposes of condition 3, the company and a relevant person enter into a leaseback agreement if the company grants to the relevant person out of the interest transferred to the company—

(a) a lease (if the interest transferred is freehold), or

(b) a sub-lease (if the interest transferred is leasehold).

(6) Condition 4 is that the company agrees to hold the interest in the land as a bond asset until the termination of the bond.

(7) Alternative finance arrangements may make provision for all or part of the interest transferred to the company to be substituted by another qualifying interest in land (“the substituted interest”) in such circumstances as are specified in those arrangements.

(8) If all or part of an interest in land is substituted in accordance with provision made under paragraph (7), the alternative finance arrangements continue to comply with the conditions specified in this regulation if at the time the substitution takes place those conditions are met in relation to the substituted interest.

(9) In assessing whether condition 2 is met for the purposes of paragraph (8), it is irrelevant that the company has entered into the bond mentioned in paragraph (3)(a) before the substitution takes place.

(10) Terms used in this regulation which are also used in paragraph 5 of Schedule 61 to the Finance Act 2009(1), unless otherwise defined in these Regulations, have the same meaning as in that paragraph.

(11) For the purposes of this regulation—

(a) “company” means a company formed under the Companies Acts, and

(b) it does not matter whether the company—

(i) is formed specially in connection with raising money through available arrangements,

(ii) is formed by the Treasury, or

(iii) is independent of the Treasury.

(1)

2009 c. 10.