Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 11 para 10

Condition 5: minimum capital payments threshold

Schedule 11, paragraph 10 sets out the fifth condition that must be met for alternative property finance arrangements to qualify for relief, requiring that a minimum proportion of capital payments be made to the financial institution before the bond ends.

• Condition 5 concerns the total capital payments made by the purchaser (B) to the financial institution before the bond terminates.
• The total of these capital payments must equal at least 60% of the market value of the land interest at the date of the first transaction.
• The market value is assessed as at the effective date of the first transaction, not at any later point during the arrangement.
• This condition ensures that the arrangement genuinely transfers a substantial economic interest in the property to the purchaser over the life of the bond.