Land and Buildings Transaction Tax (Scotland) Act 2013 section Schedule 7 para 5

A transfer to the person that results from the exercise of the right

Schedule 7 paragraph 5 sets out the conditions under which the third transaction in an alternative finance arrangement — the transfer of the property back to the individual — is exempt from LBTT.

• The third transaction is the transfer of the property back to the individual when they exercise their right to repurchase it from the financial institution.
• This transfer is exempt from LBTT provided that all LBTT requirements for the first transaction (the individual's sale to the financial institution) and the second transaction (the lease or sub-lease back to the individual) have been properly complied with.
• Between the second and third transactions, the financial institution must have held the interest in the property that it purchased under the first transaction at all times.
• Similarly, the individual must have held the lease or sub-lease granted under the second transaction continuously throughout the period between the second and third transactions.