Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 10 para 7

Exempt interest status for financial institutions under sale-and-leaseback arrangements

Schedule 10 paragraph 7 sets out the conditions under which a financial institution's interest in land, acquired as part of an alternative property finance sale-and-leaseback arrangement, qualifies as an exempt interest for land transaction tax purposes, and when that exempt status is lost.

• When a financial institution acquires land under a qualifying sale-and-leaseback arrangement (as described in paragraph 2), the interest it holds is generally treated as an exempt interest for land transaction tax purposes.
• The exempt status is lost if the leaseback to the original seller comes to an end, or if the seller's right to repurchase the property ceases or becomes restricted in any way.
• The exempt interest treatment does not apply at all if the financial institution's purchase of the land already qualifies for group relief, acquisition relief, or reconstruction relief — even if that other relief is later withdrawn.
• The exempt interest treatment does not cover the initial purchase transaction itself, nor any further transaction involving the transfer of the property back to the original seller or a third party under the arrangement.