Part 4

Stamp duty land tax

Reliefs

Alternative property finance: land sold to financial institution and leased to person
71A
1
This section applies where arrangements are entered into between
a person
and a financial institution under which—
a
the institution purchases a major interest in land or an undivided share of a major interest in land (“
the first transaction
”),
b
where the interest purchased is an undivided share, the major interest is held on trust for the institution and the
person
as beneficial tenants in common,
c
the institution (or the person holding the land on trust as mentioned in paragraph (b)) grants to the
person
out of the major interest a lease (if the major interest is freehold) or a sub-lease (if the major interest is leasehold)
(“
the second transaction
”), and
d
the institution and the
person
enter into an agreement under which the
person
has a right to require the institution or its successor in title to transfer to the
person
(in one transaction or a series of transactions) the whole interest purchased by the institution under the first transaction.
2
The first transaction is exempt from charge if the vendor is—
a
the
person
, or
b
another financial institution by whom the interest was acquired under arrangements of the kind mentioned in subsection (1) entered into between it and the
person
.
3
The second transaction is exempt from charge if the provisions of this Part relating to the first transaction are complied with (including the payment of any tax chargeable).
4
Any transfer to the
person
that results from the exercise of the right mentioned in subsection (1)(d)
(“
a further transaction
”) is exempt from charge if—
a
the provisions of this Part relating to the first and second transactions are complied with, and
b
at all times between the second transaction and the further transaction—
i
the interest purchased under the first transaction is held by a financial institution so far as not transferred by a previous further transaction, and
ii
the lease or sub-lease granted under the second transaction is held by the
person
.
5
The agreement mentioned in subsection (1)(d) is not to be treated—
a
as substantially performed unless and until the whole interest purchased by the institution under the first transaction has been transferred (and accordingly section 44(5) does not apply), or
b
as a distinct land transaction by virtue of section 46 (options and rights of pre-emption).
6
The requirements of subsection (1), or (4)(b)(ii), are not met if—
a
the
person
enters into the arrangement, or holds the lease or sub-lease, as trustee and any beneficiary of the trust is not
a person
, or
b
the
person
enters into the arrangements, or holds the lease or sub-lease, as partner and any of the other partners is not
a person
.
7
A further transaction that is exempt from charge by virtue of subsection (4) is not a notifiable transaction unless the transaction involves the transfer to the
person
of the whole interest purchased by the institution under the first transaction, so far as not transferred by a previous further transaction.
8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
References in this section to
a person
shall be read, in relation to times after the death of the
person
concerned, as references to his personal representatives.
10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S. 71A inserted (with effect in accordance with Sch. 8 para. 7 of the amending Act) by Finance Act 2005 (c. 7), Sch. 8 para. 2
Pt. 4 construed as one with S.I. 2006/575, reg. 43 (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 43(4)
S. 71A(6) ceased to have effect (with effect in accordance with s. 168(5) of the amending Act) by virtue of Finance Act 2006 (c. 25), s. 168(2)
Words in ss. 71A-73 substituted (with effect in accordance with s. 168(5) of the amending Act) by Finance Act 2006 (c. 25), s. 168(1)
Word in ss. 71A-73 substituted (with effect in accordance with s. 168(5) of the amending Act) by Finance Act 2006 (c. 25), s. 168(1)
Pt. 4 modified (coming into force at 2 p.m. on 6.12.2006) by The Stamp Duty Land Tax (Variation of the Finance Act 2003) Regulations 2006 (S.I. 2006/3237), regs. 1, 2, Sch.
S. 71A(8) omitted (with effect in accordance with Sch. 21 para. 6 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 21 para. 3(1)
S. 71A(10) omitted (with effect in accordance with s. 29(4) of the amending Act) by virtue of Scotland Act 2012 (c. 11), s. 44(2)(b)(3)(b), Sch. 3 para. 9 (with s. 29(5)(6)); S.I. 2015/637, art. 2
Pt. 4 modified (17.7.2013) by Finance Act 2013 (c. 29), s. 194(8)-(12)
Pt. 4 applied (17.7.2014) by Finance Act 2014 (c. 26), ss. 223(8)(9)(d)
Pt. 4 modified (temp.) (22.7.2020) by Stamp Duty Land Tax (Temporary Relief) Act 2020 (c. 15), s. 1 (as amended (10.6.2021) by 2021 c. 26, s. 87(2))
Pt. 4 modified (temp.) (10.6.2021) by 2020 c. 15, s. 1A (as inserted by Finance Act 2021 (c. 26), s. 87(3))
Pt. 4 modified (19.3.2025) by The Co-ownership Contractual Schemes (Tax) Regulations 2025 (S.I. 2025/200), regs. 1(2), 28, 30 (with reg. 63)
Pt. 4 applied (19.3.2025) by The Co-ownership Contractual Schemes (Tax) Regulations 2025 (S.I. 2025/200), regs. 1(2), 29(2)(5) (with reg. 63)