Land and Buildings Transaction Tax (Scotland) Act 2013 section Schedule 8 para 24

Control of the underlying asset by a bond-holder

Schedule 8, paragraph 24 restricts the LBTT reliefs available for alternative finance investment bonds where a bond-holder, or a group of connected bond-holders, acquires control of the underlying asset.

• The reliefs for the first transaction, the second transaction, and related asset-substitution provisions are unavailable if a single bond-holder or a group of connected bond-holders acquires control of the underlying asset.
• Control is acquired when a bond-holder (or connected group) obtains sufficient rights to exercise management and control of the bond assets to the exclusion of all other bond-holders.
• If control is acquired within 30 days of the effective date of the first transaction, the first-transaction relief simply does not apply — meaning LBTT is due in the normal way.
• If control is acquired after that 30-day window, and the conditions for the first-transaction relief had already been met, the relief is treated as withdrawn and LBTT becomes payable retrospectively.