57ASale and leaseback arrangements

1

The leaseback element of a sale and leaseback arrangement is exempt from charge if the qualifying conditions specified below are met.

2

A “sale and leaseback”arrangement means an arrangement under which—

a

A transfers or grants to B a major interest in land (the “sale”), and

b

out of that interest B grants a lease to A (the “leaseback”).

3

The qualifying conditions are—

a

that the sale transaction is entered into wholly or partly in consideration of the leaseback transaction being entered into,

b

that the only other consideration (if any) for the sale is the payment of money or the assumption, satisfaction or release of a debt (or both),

c

that the sale is not a transfer of rights within the meaning of section 45 (contract and conveyance: effect of transfer of rights) or 45A (contract providing for conveyance to third party: effect of transfer of rights), and

d

where A and B are both bodies corporate at the effective date of the leaseback transaction, that they are not members of the same group for the purposes of group relief (see paragraph 1 of Schedule 7) at that date.

4

In this section—

• “debt” means an obligation, whether certain or contingent, to pay a sum of money either immediately or at a future date; and

• “money” means money in sterling or another currency.