188体育

The provisions at paragraph 11 of Schedule 6C supplement the general SDLT provisions for alternative finance arrangements in section 71A Finance Act 2003 (land sold to financial institution and leased to person) and section 73 Finance Act 2003 (land sold to financial institution and re-sold to person).

Our guidance on sections 71A and 73 may be found at聽SDLTM28005

The effect is that eligibility for relief, and whether relief is withdrawn, is determined by the circumstances of the 鈥渞elevant person鈥� rather than the 鈥渇inancial institution鈥� (para 11(3)(a)). The 鈥渞elevant person鈥� is the person other than the financial institution who entered into the alternative finance arrangement.

Similarly, liability for tax when relief is withdrawn lies with the 鈥渞elevant person鈥� (paras 5 and 6 of Schedule 23 to the Finance Act 2021).

Example

A purchaser enters into alternative financing arrangements with a bank whereby the bank purchases land in a special tax site for 拢2,000,000 and leases it to the purchaser. The purchaser intends to use all the land in a qualifying manner. The bank claims freeport or investment zone relief for the 鈥榝irst transaction鈥� (para 11(3)(a)) and the purchaser claims alternative property finance relief for the second transaction (section 73(3) FA03).

After 12 months the purchaser ceases to use the land in a qualifying manner. The purchaser makes a further return (section 81ZA(1)) and is liable for the SDLT due on 拢2,000,000 (section 85(3)).