SDLTM28050 - Reliefs: Alternative Property Finance

Interest held by financial institution: FA03/S73B

The interest held by a financial institution as a result of the ‘first transaction’ (‘the FI interest’) (FA03/S71A(1)(a), FA03/S72(1)(a) or FA03/S72A(1)(a)) is an ‘exempt interest’ within the meaning of FA03/SCH3. this means in particular that dealings in that interest, or an interest derived from that interest, are not notifiable.

The interest ceases to be an exempt interest if:

  • The lease or agreement mentioned in FA03/S71A(1)(c), FA03/S72(1)(b) or FA03/S72A(1)(b) ceases to have effect, or
  • The right under FA03/S71A(1)(d), FA03/S72(1)(c) or FA03/S72A(1)(c) (that is, the right to require a transfer of the financial institution’s interest to the person entering into the arrangements) cease to have effect or becomes subject to a restriction.

The FI interest is not an exempt interest if group relief was claimed on the first transaction.

The FI interest is not an exempt interest in respect of:

  • The first transaction itself (so that even if the first transaction is exempt from charge it remains notifiable), or
  • A further transaction or third transaction within the meaning of FA03/S71A(4), FA03/S72(4) or FA03/S72A(4) (these transactions will generally be exempt from charge, but remain notifiable).

FA03/S73B has effect in relation to anything that would, but for the exemption, be a land transaction with an effective date on or after 22 March 2007. It is immaterial when the FI interest originally came into existence.

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