Land and Buildings Transaction Tax (Scotland) Act 2013 section Schedule 8 paragraph 19

Exemption from charge for the second transaction in an alternative finance investment bond arrangement

Schedule 8 paragraph 19 sets out when the second transaction in an alternative finance investment bond arrangement is exempt from LBTT.

• The second transaction (typically the transfer of the land interest back from the bond holder) is exempt from LBTT provided all of conditions A to G are satisfied and the LBTT rules relating to the first transaction have been properly complied with.
• Both requirements must be met — satisfying the conditions alone is not sufficient if the first transaction's LBTT obligations have not been fulfilled.
• The exemption is subject to the rules on substitution of the bond asset, meaning that if the original land interest is replaced by an interest in different land, additional provisions in paragraphs 21 and 22 apply.
• The exemption is also subject to paragraph 24, which can withdraw the relief where the bond holder acquires control of the underlying asset.