Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017

Shared ownership trusts: meaning of shared ownership trust and other key terms

10 (1) This paragraph applies to paragraphs 11 to 17.

(2) A “shared ownership trust” means a trust of land within the meaning of section 1 of the Trusts of Land and Appointment of Trustees Act 1996 (c. 47) which satisfies the following conditions.

(3) Condition 1 is that the trust property is—

(a) a dwelling, and

(b) in Wales.

(4) Condition 2 is that one of the beneficiaries (“the social landlord”) is a qualifying body.

(5) Condition 3 is that the terms of the trust—

(a) provide for one or more of the individual beneficiaries (“the buyer”) to have exclusive use of the trust property as the only or main residence of the buyer,

(b) require the buyer to make an initial payment to the social landlord (“the initial capital”),

(c) require the buyer to make additional payments to the social landlord by way of compensation under section 13(6)(a) of the Trusts of Land and Appointment of Trustees Act 1996 (“the rent-equivalent payments”),

(d) enable the buyer to make other additional payments to the social landlord (“equity-acquisition payments”),

(e) determine the initial beneficial interests of the social landlord and of the buyer by reference to which the initial capital was calculated,

(f) specify a sum, equating or relating to the market value of the dwelling, by reference to which the initial capital was calculated, and

(g) provide for the buyer’s beneficial interest in the trust property to increase, and the social landlord’s to diminish or to be extinguished as equity-acquisition payments are made.

(6) Section 70 (meaning of market value) does not apply to this paragraph.

(7) In Condition 1, “dwelling” includes land which is to be used for the construction of a dwelling.

(8) In Condition 2, “qualifying body” means—

(a) a local housing authority within the meaning given by section 1 of the Housing Act 1985 (c. 68);

(b) a housing association within the meaning given by the Housing Associations Act 1985 (c. 69);

(c) a housing action trust established under Part 3 of the Housing Act 1988 (c. 50).