Finance Act 2003

72 Alternative property finance [F1 in Scotland]: land sold to financial institution and leased to [F2 person] U.K.

(1) This section applies where arrangements are entered into between [F3 a person] and a financial institution under which the institution—

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

(b) grants to the [F2 person] out of that interest a lease (if the interest acquired is [F4 the interest of the owner]) or a sub-lease (if the interest acquired is [F5 the tenant's right over or interest in a property subject to a lease]) (“the second transaction”), and

(c) enters into an agreement under which the [F2 person] has a right to require the institution F6 ... to transfer the major interest purchased by the institution under the first transaction.

(2) The first transaction is exempt from charge if the vendor is—

(a) the [F2 person], or

(b) another financial institution by whom the interest was acquired under arrangements of the kind mentioned in subsection (1) entered into between it and the [F2 person].

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

(4) A transfer to the [F2 person] that results from the exercise of the right mentioned in subsection (1)(c) (“the third transaction”) is exempt from charge if—

(a) the provisions of this Part relating to the first and second transactions are complied with, and

(b) at all times between the second and third transactions—

(i) the interest purchased under the first transaction is held by a financial institution, and

(ii) the lease or sub-lease granted under the second transaction is held by the [F2 person].

(5) The agreement mentioned in subsection (1)(c) is not to be treated—

(a) as substantially performed unless and until the third transaction is entered into (and accordingly section 44(5) does not apply), or

(b) as a distinct land transaction by virtue of section 46 (options and rights of pre-emption).

[F7 (6) The requirements of subsection (1), or (4)(b)(ii), are not met if—

(a) the [F2 person] enters into the arrangement, or holds the lease or sub-lease, as trustee and any beneficiary of the trust is not [F3 a person], or

(b) the [F2 person] enters into the arrangements, or holds the lease or sub-lease, as partner and any of the other partners is not [F3 a person].]

[F8 (7) In this section “financial institution” has the meaning given by section 46 of the Finance Act 2005 (alternative finance arrangements).]

F9 (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) References in this section to [F3 a person] shall be read, in relation to times after the death of the [F2 person] concerned, as references to his personal representatives.

[F10 (10) This section applies only in relation to land in Scotland.]

Textual Amendments

F1 Words in s. 72 heading inserted (with effect in accordance with Sch. 8 para. 7 of the amending Act) by Finance Act 2005 (c. 7), Sch. 8 para. 3(6)

F2 Word in ss. 71A-73 substituted (with effect in accordance with s. 168(5) of the amending Act) by Finance Act 2006 (c. 25), s. 168(1)

F3 Words in ss. 71A-73 substituted (with effect in accordance with s. 168(5) of the amending Act) by Finance Act 2006 (c. 25), s. 168(1)

F4 Words in s. 72(1)(b) substituted (with effect in accordance with Sch. 8 para. 7 of the amending Act) by Finance Act 2005 (c. 7), Sch. 8 para. 3(2)(a)(i)

F5 Words in s. 72(1)(b) substituted (with effect in accordance with Sch. 8 para. 7 of the amending Act) by Finance Act 2005 (c. 7), Sch. 8 para. 3(2)(a)(ii)

F6 Words in s. 72(1)(c) repealed (with effect in accordance with Sch. 8 para. 7 of the amending Act) by Finance Act 2005 (c. 7), Sch. 8 para. 3(2)(b), Sch. 11 Pt. 3(1)

F7 S. 72(6) ceased to have effect (with effect in accordance with s. 168(5) of the amending Act) by virtue of Finance Act 2006 (c. 25), s. 168(2)

F8 S. 72(7) substituted (with effect in accordance with s. 75(4) of the amending Act) by Finance Act 2007 (c. 11), s. 75(3)

F9 S. 72(8) repealed (with effect in accordance with Sch. 8 para. 7 of the amending Act) by Finance Act 2005 (c. 7), Sch. 8 para. 3(4), Sch. 11 Pt. 3(1)

F10 S. 72(10) inserted (with effect in accordance with Sch. 8 para. 7 of the amending Act) by Finance Act 2005 (c. 7), Sch. 8 para. 3(5)

Commencement Information

I1 Pt. 4 wholly in force at Royal Assent subject to Sch. 19, see s. 124, Sch. 19 para. 1(1)