Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 10 paragraph 6

Arrangements involving third-party funding within a group transaction

Paragraph 6 of Schedule 10 explains what type of arrangements will cause a group relief claim to fail under paragraph 5(a) — specifically, where the funding for the transaction comes from outside the corporate group.

• Group relief from LBTT can be denied where arrangements exist that involve a person outside the corporate group providing funding or making a payment connected to the transaction.
• The arrangements in question are those under which the seller, the buyer, or any other company in the same group is enabled to provide the consideration (or part of it) for the land transaction.
• The test is whether the ability to provide or part with the consideration arises by reason of, or as a consequence of, a transaction (or series of transactions) involving a payment or disposition by a non-group party.
• This provision is designed to prevent groups from using external funding arrangements to artificially structure transactions in a way that exploits the group relief provisions.