Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 7 paragraph 22

Cessation of exempt interest status in alternative property finance arrangements

Schedule 7 paragraph 22 sets out the circumstances in which a financial institution's interest in land, previously treated as exempt under alternative property finance (Sharia-compliant) arrangements, loses its exempt status.

• An exempt interest held by a financial institution can lose its exempt status if certain conditions are no longer met.
• The exemption ceases if the lease or agreement under the sale-and-leaseback arrangement (or the shared ownership arrangement) comes to an end.
• The exemption also ceases if the individual's right to call for the property to be transferred back to them (the purchase option or re-acquisition right) either lapses or becomes restricted.
• Once the interest is no longer exempt, normal LBTT rules will apply to any subsequent transactions involving that interest.