Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 8 paragraph 6

Exceptions to the restriction on relief where a bond holder acquires control

Schedule 8 paragraph 6 sets out two situations where the restriction in paragraph 5 does not apply, meaning the bond holder can still benefit from the relief that treats certain bond transactions as not being chargeable for LBTT purposes.

• Where a bond holder unknowingly acquires control over bond assets and promptly transfers sufficient rights to relinquish that control, the restriction on relief does not apply.
• Where a bond holder is underwriting a public offer of rights under the bond and does not actually exercise management and control of the bond assets, the restriction does not apply.
• Underwriting means agreeing to make capital payments under the bond if other persons fail to do so, which may temporarily give the underwriter a controlling position.
• These exceptions ensure that inadvertent or temporary control over bond assets does not result in the loss of LBTT relief for alternative finance investment bonds.

---