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HMRC internal manual

Stamp Duty Land Tax Manual

Reliefs: Alternative property finance

Land sold to a financial institution and leased to an individual: Scotland: Generaloverview FA03/S72

Relief is available where a financial institution purchases a property and leases it toan individual over an agreed term and at the end of that term transfers the reversion tothat individual.

As three land transactions take place under these arrangements the effect of the relief isto bring the stamp duty land tax payable on the purchase of a property using thesearrangements in line with the tax that would be due where a purchase is made using aconventional mortgage product.

The parity is achieved by relieving the second (lease) and third (eventual transfer ofreversion) transactions from stamp duty land tax and disapplying the substantialperformance tests in FA03/S44 and options rules in FA03/S46.