SCHEDULE 8Relief for alternative finance investment bonds

PART 5Supplementary

Substitution of asset

I121

1

This paragraphs applies if—

a

conditions A to C and G are met in relation to an interest in land (“the original land”),

b

Q ceases to hold the original land as a bond asset (and, accordingly, transfers it to P) before the termination of the alternative finance investment bond,

c

P and Q enter into further arrangements falling within paragraph 8 relating to an interest in other land (“the replacement land”), and

d

the value of the interest in the replacement land at the time that it is transferred from P to Q is greater than or equal to the value of the interest in the original land at the time of the first transaction.

2

Paragraphs 15 to 20 apply—

a

in relation to the original land with the modification set out in sub-paragraph (3), and

b

in relation to the replacement land with the modifications set out in sub-paragraph (4).

3

Condition F does not need to be met in relation to the original land if conditions A, B, C, F and G (as modified by sub-paragraph (4)) are met in relation to the replacement land.

4

In relation to the replacement land—

a

condition E applies as if the reference to the interest in the land were a reference to the interest in the original land, and

b

condition G apples as if the reference in paragraph 14(1)(b) to the first transaction were a reference to the first transaction relating to the original land.

5

If the replacement land is in Scotland, the original land ceases to be subject to the security registered in pursuance of condition D when—

a

Q provides the Tax Authority with the prescribed evidence that condition G is met in relation to the original land, and

b

condition D is met in relation to the replacement land.

6

If the replacement land is not in Scotland, the original land ceases to be subject to the security registered in pursuance of condition D when Q provides the Tax Authority with the prescribed evidence that—

a

condition G is met in relation to the original land, and

b

each of conditions A to C is met in relation to the replacement land.