Land and Buildings Transaction Tax (Scotland) Act 2013 section Schedule 17, paragraph 40

Charities relief for transfers of partnership interests

Schedule 17, paragraph 40 sets out how the standard charities relief rules (in Schedule 13) are adapted when a charity acquires an interest in a partnership, rather than directly purchasing land or buildings.

• When a transfer of an interest in a partnership is itself a chargeable transaction (under paragraphs 17 or 32 of Schedule 17), it can qualify for charities relief if the transferee is a charity.
• To qualify, every chargeable interest held as partnership property immediately after the transfer must be held for qualifying charitable purposes — either for use in furtherance of the charity's purposes, or as an investment where profits are applied to charitable purposes.
• Relief is withdrawn (in whole or in part) if the transferee ceases to be a charity, or if any partnership property that was held immediately after the transfer (or derived from it) comes to be used for non-charitable purposes — a "disqualifying event."
• Where relief is only partially withdrawn, the proportion clawed back is determined by comparing the partnership's chargeable interests at the time of the original transfer with those at the time of the disqualifying event, and the extent to which property has shifted to non-charitable use.

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