Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 8 paragraph 25

Exceptions to the loss of relief where a bond holder acquires control

Paragraph 25 sets out two circumstances in which the alternative finance investment bond reliefs remain available even though a bond holder (or connected bond holders) has acquired enough rights to control the bond assets.

• The restriction on relief described in paragraph 24 does not apply in two specific situations, allowing the tax reliefs to be preserved.
• The first exception applies where the bond holder did not know and had no reason to suspect that acquiring the rights would give them management and control of the bond assets, and they transfer sufficient rights as soon as reasonably practicable after becoming aware of the situation.
• The second exception applies where the bond holder is underwriting a public offer of rights under the bond and does not actually exercise any right of management and control over the bond assets.
• Underwriting in this context means agreeing to make capital payments under the bond if other persons fail to do so.