Land and Buildings Transaction Tax (Scotland) Act 2013 section Schedule 8 paragraph 10

Condition C — income generation through leaseback or other arrangements

Schedule 8 paragraph 10 sets out Condition C, which requires that there is an arrangement in place to generate income or gains for the alternative finance investment bond, typically through a leaseback from the bond issuer to the original seller.

• Condition C requires that the transaction includes an arrangement to generate income or gains for the alternative finance investment bond.
• The most common way to satisfy Condition C is for the bond issuer (Q) and the original owner (P) to enter into a leaseback agreement, where Q grants P a lease or sub-lease over the property that was transferred.
• If Q acquired outright ownership, Q grants P a lease; if Q acquired a tenant's interest (leasehold), Q grants P a sub-lease.
• The Scottish Ministers may specify additional or alternative conditions by regulations that can also satisfy Condition C.