Introduction Details of the Sections Section 157 – Land sold to a financial institution and leased to a person
322.Subsection (1) provides that this section applies to alternative property finance arrangements under section 71A or section 72, Finance Act 2003 entered into between a financial institution and another person, where that institution purchases one or more dwellings under the “first transaction” (as defined under section 71A or section 72).
323.Subsection (2) provides that, where the person entering into the arrangements with the financial institution (the Lessee) is a company, this Part applies as if the interest held by the financial institution was actually held by the company and that the lease granted to the company under the “second transaction” had not been granted. In effect, the alternative property finance arrangements are ignored and the company is treated as owning the interest in the dwelling outright for the purposes of this Part.
324.Subsection (3) provides at what times the alternative finance arrangements will be considered to be in operation for the purposes of subsection (2).
325.Subsection (4) provides that, where a company is treated as holding an interest at a particular time under subsection (2), it shall be treated as holding it as a member of a partnership where it holds the leasehold interest (granted under the “second transaction”) as a member of the partnership.
326.Subsection (5) provides that, that, where the alternative finance arrangements operate for the benefit of a collective investment scheme, this Part applies as if the interest held by the financial institution was actually held by the lessee for the purposes of the collective investment scheme (and not by the financial institution) and that the lease granted under the “second transaction” had not been granted. In effect, the alternative property finance arrangements are ignored and the lessee is treated as owning the interest in the dwelling outright for the purposes of this Part.
327.Subsection (6) provides at what times the alternative finance arrangements will be considered to be in operation for the purposes of subsection (5).
328.Subsection (7) defines “financial institution”, “the first transaction”, “further transaction”, “the leasehold interest” and “the second transaction” for the purposes of this section.
329.Subsection (8) defines “major interest in land” by reference to section 117 of Finance Act 2003.
330.Subsection (9) provides that, where the lessee is an individual, references to the lessee in subsections (5) and (6), include the lessee’s personal representatives after his or her death.