»Ê¹ÚÌåÓýapp

»Ê¹ÚÌåÓýapp 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 SDLTM28005

»Ê¹ÚÌåÓýapp effect is that eligibility for relief, and whether relief is withdrawn, is determined by the circumstances of the “relevant personâ€� rather than the “financial institutionâ€� (para 11(3)(a)). »Ê¹ÚÌåÓýapp “relevant personâ€� 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Similarly, liability for tax when relief is withdrawn lies with the “relevant person� (paras 5 and 6 of Schedule 23 to the Finance Act 2021).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 £2,000,000 and leases it to the purchaser. »Ê¹ÚÌåÓýapp purchaser intends to use all the land in a qualifying manner. »Ê¹ÚÌåÓýapp bank claims freeport or investment zone relief for the ‘first transactionâ€� (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. »Ê¹ÚÌåÓýapp purchaser makes a further return (section 81ZA(1)) and is liable for the SDLT due on £2,000,000 (section 85(3)).