Part 4Stamp duty land tax

Reliefs

73Alternative property finance: land sold to financial institution and re-sold to F1person

(1)

This section applies where arrangements are entered into between F2a person 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 F1person (“the second transaction”), and

(b)

the F1person grants the institution a legal mortgage over that interest.

(2)

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

(a)

the F1person concerned, or

(b)

another financial institution by whom the interest was acquired under other arrangements of the kind mentioned in F3section 71A(1)F4... entered into between it and the F1person.

(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 F5on a chargeable consideration that is not less than the market value of the interest and, in the case of the grant of a lease at a rent, the rent.).

F6(4)

This section does not apply if—

(a)

the F1person enters into the arrangements as trustee and any beneficiary of the trust is not F2a person, or

(b)

the F1person enters into the arrangements as partner and any of the other partners is not F2a person.

(5)

In this section—

F7(a)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)

“legal mortgage”—

(i)

in relation to land in England F8..., means a legal mortgage as defined in section 205(1)(xvi) of the Law of Property Act 1925 (c. 20);

F9(ii)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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 F2a person shall be read, in relation to times after the death of the F1person concerned, as references to his personal representatives.