Section 71A | Alternative property finance: land sold to financial institution and leased to person ^F1

(1)This section applies where arrangements are entered into between a person and a financial institution under which—^F2

(a)the institution purchases a major interest in land or an undivided share of a major interest in land (“the first transaction”),

(b)where the interest purchased is an undivided share, the major interest is held on trust for the institution and the person as beneficial tenants in common,^F3

(c)the institution (or the person holding the land on trust as mentioned in paragraph (b)) grants to the person out of the major interest a lease (if the major interest is freehold) or a sub-lease (if the major interest is leasehold) (“the second transaction”), and^F3

(d)the institution and the person enter into an agreement under which the person has a right to require the institution or its successor in title to transfer to the person (in one transaction or a series of transactions) the whole interest purchased by the institution under the first transaction.^F3

(2)The first transaction is exempt from charge if the vendor is—

(a)the person, or^F3

(b)another financial institution by whom the interest was acquired under arrangements of the kind mentioned in subsection (1) entered into between it and the person.^F3

(3)The second transaction is exempt from charge if the provisions of this Part relating to the first transaction are complied with (including the payment of any tax chargeable).

(4)Any transfer to the person that results from the exercise of the right mentioned in subsection (1)(d) (“a further transaction”) is exempt from charge if—^F3

(a)the provisions of this Part relating to the first and second transactions are complied with, and

(b)at all times between the second transaction and the further transaction—

(i)the interest purchased under the first transaction is held by a financial institution so far as not transferred by a previous further transaction, and

(ii)the lease or sub-lease granted under the second transaction is held by the person.^F3

(5)The agreement mentioned in subsection (1)(d) is not to be treated—

(a)as substantially performed unless and until the whole interest purchased by the institution under the first transaction has been transferred (and accordingly section 44(5) does not apply), or

(b)as a distinct land transaction by virtue of section 46 (options and rights of pre-emption).

(6)The requirements of subsection (1), or (4)(b)(ii), are not met if—^F4

(a)the person enters into the arrangement, or holds the lease or sub-lease, as trustee and any beneficiary of the trust is not a person, or^F4F3F2

(b)the person enters into the arrangements, or holds the lease or sub-lease, as partner and any of the other partners is not a person.^F4F3F2

(7)A further transaction that is exempt from charge by virtue of subsection (4) is not a notifiable transaction unless the transaction involves the transfer to the person of the whole interest purchased by the institution under the first transaction, so far as not transferred by a previous further transaction.^F3

(8)Repealed^F5

(9)References in this section to a person shall be read, in relation to times after the death of the person concerned, as references to his personal representatives.^F2F3

(10)Repealed^F6