Finance Act 2003

73 Alternative property finance: land sold to financial institution and re-sold to [F1 person] U.K.

(1) This section applies where arrangements are entered into between [F2 a 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 [F1 person] (“the second transaction”), and

(b) the [F1 person] grants the institution a legal mortgage over that interest.

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

(a) the [F1 person] concerned, or

(b) another financial institution by whom the interest was acquired under other arrangements of the kind mentioned in [F3 section 71A(1), 72(1) or 72A(1)] entered into between it and the [F1 person].

(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 [F4 on 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.]).

[F5 (4) This section does not apply if—

(a) the [F1 person] enters into the arrangements as trustee and any beneficiary of the trust is not [F2 a person], or

(b) the [F1 person] enters into the arrangements as partner and any of the other partners is not [F2 a person].]

(5) In this section—

[F6 (a) In this section “financial institution” has the meaning given by section 46 of the Finance Act 2005 (alternative finance arrangements).]

(b) “legal mortgage”—

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

(ii) in relation to land in Scotland, means a standard security;

(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 [F2 a person] shall be read, in relation to times after the death of the [F1 person] concerned, as references to his personal representatives.

Textual Amendments

F1 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)

F2 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)

F3 Words in s. 73(2)(b) substituted (with effect in accordance with Sch. 8 para. 7 of the amending Act) by Finance Act 2005 (c. 7), Sch. 8 para. 5(2)

F4 Words in s. 73(3) inserted (with effect in accordance with s. 168(5) of the amending Act) by Finance Act 2006 (c. 25), s. 168(3)

F5 S. 73(4) 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)

F6 S. 73(5)(a) substituted (with effect in accordance with s. 75(4) of the amending Act) by Finance Act 2007 (c. 11), s. 75(3)

Commencement Information

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