Reliefs: Right to buy transactions, shared ownership leases etc: Rent to shared ownership lease: treatment of transactions FA03/SCH9/PARA13
FA03/SCH9/PARA9 applies to a “rent to shared ownership lease scheme”. This means a scheme under which a person or persons may be granted a shared ownership lease of a dwelling by a qualifying body and that body grants to the person or persons an assured shorthold tenancy of the dwelling.
“Assured shorthold tenancy” has the same meaning as in Part 1 Housing Act 1988.
“May be granted” includes cases where
- the terms of the scheme entitle the person or persons to apply to be granted a shared ownership lease, subject to an assessment of their financial circumstances, or
- the person or persons have a contractual or other right to be granted a shared ownership lease: for example, where a contract is in place but has not been completed.
Transactions between the qualifying body and the person or persons (or any of them) under these schemes are treated as not linked for the purposes of FA03/S108. This includes
- the grant of an assured shorthold tenancy
- the grant of a shared ownership lease and
- any other land transaction (e.g. an option) entered into as part of the scheme.
The person or persons’ possession of the dwelling under the assured shorthold tenancy is disregarded in determining the effective date of the grant of the shared ownership lease under FA03/S44. So, even if the person takes possession under an assured shorthold tenancy after contracts are exchanged but before the lease is granted, the effective date will still be the date on which the lease is granted.
(Substantial performance is not triggered in any event if the person already occupies the property under the assured shorthold tenancy when contracts are exchanged - see SDLTM07900.)