SCHEDULE 61Alternative finance investment bonds
Part 3Transactions relating to underlying assets consisting of land
Supplementary
Substitution of asset
18
(1)
This paragraph 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 5(2) 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 6 to 17 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 applies as if the reference in paragraph 5(11)(b) to the first transaction were a reference to the first transaction relating to the original land.
(5)
If the replacement land is in F1England F2... or Northern Ireland, the original land ceases to be subject to the charge F3... registered in pursuance of condition D when—
(a)
Q provides HMRC 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 F1England F4... or Northern Ireland, the original land ceases to be subject to the charge F3... registered in pursuance of condition D when Q provides HMRC 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.
(7)
This paragraph also applies where the replacement land is replaced by further replacement land; and in that event—
(a)
the references to the original land (except those in sub-paragraph (4)) are to be read as references to the replacement land, and
(b)
the references to the replacement land are to be read as references to the further replacement land.
HMRC to notify Registrar of discharge of charge
19
(1)
Where a charge F5... is discharged in accordance with paragraph 9 or 18(5) or (6), HMRC must—
(a)
in the case of a charge on land in England F6..., notify the Chief Land Register of the discharge in accordance with land registration rules (within the meaning of the Land Registration Act 2002),
F7(b)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c)
in the case of a charge on land in Northern Ireland, notify the Registrar of Titles of the discharge.
(2)
HMRC must do so within the period of 30 days beginning with the date on which Q provides the evidence in question.
Relief not available where bond-holder acquires control of underlying asset
20
(1)
The reliefs provided by paragraphs 6 to 12 (and paragraph 18 so far as it relates to those paragraphs) are not available if control of the underlying asset is acquired by—
(a)
a bond-holder, or
(b)
a group of connected bond-holders.
(2)
A bond-holder (“BH”), or a group of connected bond-holders, acquires control of the underlying asset if—
(a)
the rights of bond-holders under an alternative finance investment bond include the right of management and control of the bond assets, and
(b)
BH, or the group, acquires sufficient rights to enable BH, or the members of the group acting jointly, to exercise the right of management and control of the bond assets to the exclusion of any other bond-holders.
(3)
In accordance with sub-paragraph (1), in the case of the reliefs provided by paragraphs 6 and 10—
(a)
if BH, or the group, acquires control of the underlying asset before the end of the period of 30 days beginning with the effective date of the first transaction, paragraphs 6 and 10 do not apply, and
(b)
if BH, or the group, acquires control of the underlying asset after the end of that period and conditions A to C have been met, paragraphs 7 and 11 apply.
21
(1)
But paragraph 20 does not prevent the reliefs being available in either of the following cases.
(2)
The first case is where—
(a)
at the time that the rights were acquired BH (or all of the connected bond-holders) did not know and had no reason to suspect that the acquisition enabled the exercise of the right of management and control of the bond assets to the exclusion of other bond-holders, and
(b)
as soon as reasonably practicable after BH (or any of the bond-holders) becomes aware that the acquisition enables that exercise, BH transfers (or some or all of the bond-holders transfer) sufficient rights for that no longer to be possible.
(3)
The second case is where BH—
(a)
underwrites a public offer of rights under the bond, and
(b)
does not exercise the right of management and control of the bond assets.
(4)
In this paragraph—
“connected” is to be read in accordance with F8section 1122 of CTA 2010, and
“underwrite”, in relation to an offer of rights under a bond, means to agree to make payments of capital under the bond in the event that other persons do not make those payments.
Relief not available if purpose of arrangements is improper
22
(1)
The reliefs provided by paragraphs 6 to 12 (and paragraph 18 so far as it relates to those paragraphs) are not available if the arrangements mentioned in paragraph 5(2)—
(a)
are not effected for genuine commercial reasons, or
(b)
form part of arrangements of which the main purpose, or one of the main purposes, is the avoidance of liability to tax.
(2)
In sub-paragraph (1) “tax” means income tax, corporation tax, capital gains tax, stamp duty or stamp duty land tax.
Regulations
23
(1)
Regulations under any paragraph of this Schedule—
(a)
may make provision generally or only for specified purposes, or different provision for different purposes, and
(b)
may make consequential, supplementary or incidental provision (including amendments of any enactment).
(2)
Regulations under any paragraph of this Schedule are to be made by statutory instrument.
(3)
A statutory instrument containing regulations under any paragraph of this Schedule is subject to annulment in pursuance of a resolution of the House of Commons.