Part 4Stamp duty land tax

Reliefs

73I1Alternative property finance: land sold to financial institution and re-sold to individual

1

This section applies where arrangements are entered into between an individual and a financial institution under which—

a

the institution—

i

purchases a major interest in land (“the first transaction”), and

ii

sells that interest to the individual (“the second transaction”), and

b

the individual grants the institution a legal mortgage over that interest.

2

The first transaction is exempt from charge if the vendor is—

a

the individual concerned, or

b

another financial institution by whom the interest was acquired under other arrangements of the kind mentioned in F1section 71A(1), 72(1) or 72A(1) entered into between it and the individual.

3

The second transaction is exempt from charge if the financial institution complies with the provisions of this Part relating to the first transaction (including the payment of any tax chargeable).

4

This section does not apply if—

a

the individual enters into the arrangements as trustee and any beneficiary of the trust is not an individual, or

b

the individual enters into the arrangements as partner and any of the other partners is not an individual.

5

In this section—

a

“financial institution” has the same meaning as in F2section 71A;

b

“legal mortgage”—

i

in relation to land in England or Wales, means a legal mortgage as defined in section 205(1)(xvi) of the Law of Property Act 1925 (c. 20);

ii

in relation to land in Scotland, means a standard security;

iii

in relation to land in Northern Ireland, means a mortgage by conveyance of a legal estate or by demise or sub-demise or a charge by way of legal mortgage.

6

References in this section to an individual shall be read, in relation to times after the death of the individual concerned, as references to his personal representatives.