Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 10, paragraph 3

Alternative property finance: land sold to financial institution and resold to individual

Schedule 10, paragraph 3 provides relief from Land Transaction Tax where a financial institution purchases a major interest in land and then sells it back to the individual, with the individual granting the institution a legal mortgage over the property.

• Where a financial institution buys a major interest in land and then sells it to a person, with that person granting the institution a legal mortgage, certain LTT reliefs may apply to both transactions.
• The institution's purchase (the first transaction) is relieved from tax if the seller is either the person themselves or another financial institution that previously acquired the interest under similar alternative finance arrangements with the same person.
• The institution's sale back to the person (the second transaction) is relieved from tax provided the financial institution properly complies with all LTT and Tax Collection and Management (Wales) Act obligations relating to the first transaction, including paying any tax due based on consideration not less than market value (and market rent, where applicable).
• Market rent is defined as the rent the lease might reasonably be expected to fetch in the open market at the relevant time.