Reliefs: Right to buy transactions, shared ownership leases etc: Shared ownership trust: general conditions FA03/SCH9/PARA7
A shared ownership trust is a trust of land, within the meaning of section 1 Trusts of Land and Appointment of Trustees Act 1996, which meets the following conditions.
The trust property must consist of a dwelling in England and Wales. For this purpose a dwelling includes
- a building which is being constructed or adapted for use as a dwelling
- land which is to be used for the purpose of the construction of a dwelling and
- land which is, or is to become, the garden or grounds of a dwelling.
- One of the beneficiaries of the trust (known as “the social landlord”) must be a qualifying body - see SDLTM27020.
The terms of the trust must
- provide for one or more individual beneficiaries (“the purchaser”) to have exclusive use of the trust property as his or her only or main residence
- require the purchaser to make an initial payment (“the initial capital”) to the social landlord
- require the purchaser to make additional payments (“rent-equivalent payments) to the social landlord by way of compensation under section 13(6)(a) Trusts of Land and Appointment of Trustees Act 1996
- enable the purchaser to make other additional payments (“equity-acquisition payments”) to the social landlord
- determine the initial beneficial interests of the social landlord and the purchaser by reference to the initial capital
- specify a sum, equating or relating to the market value of the dwelling, by reference to which the initial capital is calculated and
- provide for the purchaser’s beneficial interest in the property to increase, and the social landlord’s to diminish (or be extinguished) as equity-acquisition payments are made.