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

PART 4 RELIEF FOR CERTAIN TRANSACTIONS

Relief for the first transaction

13 (1) The first transaction is relieved from tax if each of conditions 1 to 3 is met before the end of the period of 30 days beginning with the effective date of that transaction.

(2) Where the qualifying interest in land is replaced as the bond asset by an interest in other land, sub-paragraph (1) is subject to paragraph 18 (replacement of asset).

(3) Sub-paragraph (1) is also subject to paragraph 17 (no relief where bond-holder acquires control of underlying asset).

Withdrawal of relief for the first transaction

14 (1) Relief under paragraph 13 is withdrawn if—

(a) the qualifying interest in land is transferred by B to A without conditions 5 and 6 having been met,

(b) the period mentioned in (or prescribed under) paragraph 12(b) expires and any one of those conditions has not been met, or

(c) at any time it becomes apparent for any other reason that any one of conditions 5 to 7 cannot or will not be met.

(2) Relief under paragraph 13 is also withdrawn if condition 4 is not met.

(3) Where relief under paragraph 13 is withdrawn the amount of tax chargeable on the first transaction is the tax that would have been chargeable but for the relief if the chargeable consideration for the transaction had been the market value of the qualifying interest on the effective date of the transaction.

Relief for the second transaction

15 (1) The second transaction is relieved from tax if—

(a) each of conditions 1 to 7 is met, and

(b) the provisions of this Act and TCMA in relation to the first transaction are complied with.

(2) Where the qualifying interest in land is replaced as the bond asset by an interest in other land, sub-paragraph (1) is subject to paragraph 18 (replacement of asset).

(3) Sub-paragraph (1) is also subject to paragraph 17 (no relief where bond-holder acquires control of underlying asset).

Discharge of charge when conditions for relief met

16 If, after the effective date of the second transaction, B provides WRA with the prescribed evidence that each of conditions 1 to 3 and 5 to 7 has been met, the land ceases to be subject to the charge registered in pursuance of condition 4.

Relief not available where bond-holder acquires control of underlying asset

17 (1) Relief provided under paragraph 13 or 15 (including where the relief is provided under either paragraph as modified by paragraph 18) is not available if control of the underlying asset is acquired by—

(a) the bond-holder, or

(b) a group of connected bond-holders.

(2) A bond-holder (“BH”), or a group of connected bond-holders, acquires control of the underlying asset if—

(a) the rights of bond-holders under an alternative finance investment bond include the right of management and control of the bond assets, and

(b) BH, or the group, acquires sufficient rights to enable BH, or the members of the group acting jointly, to exercise management and control of the bond assets to the exclusion of any other bond-holders.

(3) If BH, or the group, acquires control of the underlying asset before the end of the period of 30 days beginning with the effective date of the first transaction, the effect of sub-paragraph (1) is that paragraph 13 does not apply to that transaction.

(4) If BH, or the group, acquires control of the underlying asset after the end of that period and conditions 1 to 3 have been met, the effect of sub-paragraph (1) is that any relief under paragraph 13 is treated as withdrawn under paragraph 14.

(5) But sub-paragraph (1) does not prevent the reliefs being available in either of the following cases.

(6) The first case is where—

(a) at the time that the rights were acquired BH (or all of the connected bond-holders) did not know and had no reason to suspect that the acquisition enabled the exercise of the right of management and control of the bond assets, and

(b) as soon as reasonably practicable after BH (or any of the bond-holders) becomes aware that the acquisition enables that exercise, BH transfers (or some or all of the bond-holders transfer) sufficient rights for that exercise no longer to be possible.

(7) The second case is where BH—

(a) underwrites a public offer of rights under the bond, and

(b) does not exercise the right of management and control of the bond assets.

(8) In this paragraph, “underwrite”, in relation to an offer of rights under a bond, means to agree to make payments of capital under the bond in the event that other persons do not make those payments.