Relief from multiple charges to stamp duty land tax is available
for three types of alternative property finance scheme, one of
which has two variants.
The result is that the stamp duty land tax payable is in line with that which would be payable if a property was purchased using a conventional mortgage product.
These reliefs are available to persons using alternative property financing arrangements.
Where relief is claimed a land transaction return must be completed claiming the relief and showing the chargeable consideration as the price that has been agreed between the parties to the transaction.
Land purchased by financial institution and leased to, or, in Scotland, occupied by, person - This scheme receives relief across the entire UK. A person(s) enters into arrangements with a financial institution whereby the financial institution purchases the property and grants the person a long lease with an option to have the reversion, in Scotland, ownership, transferred.
The person makes regular payments during the term of the lease. At the end of the lease, the person can exercise their right and have the reversion, in Scotland, ownership, transferred to themselves. See SDLTM28100 and SDLTM28200.
In England & Wales and Northern Ireland a variant of this scheme is relieved. A property can be held in trust for the financial institution and the person as beneficial tenants in common.
The beneficial ownership can be transferred in any number of transactions to the tenant during the course of the lease. The right to have the reversion transferred at the end of the agreement is maintained. See SDLTM28100.
A separate scheme is relieved in Scotland. The person and the financial institution purchase a major interest as owners in common.
The person has a right to exclusive occupation during the time of common ownership. The person has the right to require the institution to transfer to them the whole interest. See SDLTM28300.
Land purchased by financial institution and re-sold to person - This relief is available to schemes anywhere in the UK.
A person(s) enters into arrangements with a financial institution whereby the financial institution purchases a property for £100,000 and sells it to them for £225,000. They then pay this amount to the financial institution in instalments. See SDLTM28400.
A financial institution means