Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 7 paragraph 24

Limitations on exempt interest status under alternative property finance arrangements

Schedule 7 paragraph 24 sets out the limits on when a financial institution's interest in property qualifies as an exempt interest under Islamic (Sharia-compliant) and other alternative property finance arrangements.

• The exempt interest status granted by paragraph 21 does not apply to the initial purchase transaction itself (the "first transaction").
• It also does not apply to any third or further transaction, such as the eventual transfer of the property back to the individual.
• Third and further transactions are those defined in paragraphs 5 and 10, which cover the transfer of property back to the customer under lease-to-own or shared ownership arrangements.
• This means the exempt interest status only applies during the intermediate period while the financial institution holds the property — not at the point of initial acquisition or final transfer back.