SDLTM31325 - RIFs: Special rules when a scheme leaves the RIF regime
RIF ceasing to be a RIF and becoming an eligible co-ownership scheme
If a scheme ceases to be a RIF but continues to meet the qualifying conditions in section 20(1) FA (No 2) 2024 (See IFM9205 ) (so that it is an “eligible co-ownership scheme” (ECOS) – Regulation 29(1)(b)) then it will retain its SDLT opacity for as long as it continues to meet those conditions, or until it is wound up, or it re-enters the RIF regime (in which case the general RIF opacity rule will apply to the scheme).
Any other unauthorised co-ownership contractual scheme (UCS), so any co-ownership contractual scheme that is not a CoACS, RIF, or ECOS, whether or not it has previously been a RIF, will be transparent for SDLT purposes.
Land transaction when a RIF or eligible co-ownership contractual scheme becomes an unauthorised contractual scheme
Regulation 30 provides a statutory mechanism for the chargeable interests to revert to the investors upon the scheme exiting the RIF regime or ceasing to be an eligible co-ownership scheme, by deeming there to be a land transaction. Regulation 30 becomes a transparent UCS, then:
An SDLT exit charge arises where there is chargeable consideration in respect of the transfer of the chargeable interests to the participants.
There is an acquisition of a chargeable interest for the purposes of section 75A Finance Act 2003.