LBTT3047 Open-ended Investment Companies (OEICs) Relief

LBTT guidance on tax relief for land transactions transferring property on the conversion of an authorised unit trust to, or its amalgamation with, an open-ended investment company.

This relief is provided by The Land and Buildings Transaction Tax (Open-ended Investment Companies) (Scotland) Regulations 2015. This instrument was made in exercise of the powers conferred by section 46 of the LBTT(S) Act 2013. OEICs are defined in Section 236 of the Financial Services and Markets Act 2000.

Description of relief 

The OEICs relief provides full relief from LBTT on land transactions, transferring property on the conversion of an authorised unit trust (AUT) to, or its amalgamation with, an open-ended investment company (OEIC).

Relief conditions

In relation to the conversion of an AUT to an OEIC

  • a) the transfer forms part of an arrangement for the conversion of an authorised unit trust to an open-ended investment company, whereby the whole of the available property of the target trust becomes the whole of the property of the acquiring company;
  • (b) under the arrangement all the units in the target trust are extinguished;
  • (c) the consideration under the arrangement consists of or includes the issue of shares (“the consideration shares”) in the acquiring company to the persons who held the extinguished units;
  • (d) the consideration shares are issued to those persons in proportion to their holdings of the extinguished units; and
  • (e) the consideration under the arrangement does not include anything else, other than the assumption or discharge by the acquiring company of liabilities of the trustees of the target trust.

Relief conditions

In relation to the amalgamation of an AUT with an OEIC:

  • (a) the transfer forms part of an arrangement for the amalgamation of an authorised unit trust with an open-ended investment company, whereby the whole of the available property of the target trust becomes part (but not the whole) of the property of the acquiring company;
  • (b) under the arrangement all the units in the target trust are extinguished;
  • (c) the consideration under the arrangement consists of or includes the issue of shares (“the consideration shares”) in the acquiring company to the persons who held the extinguished units;
  • (d) the consideration shares are issued to those persons in proportion to their holdings of the extinguished units; and
  • (e) the consideration under the arrangement does not include anything else, other than the assumption or discharge by the acquiring company of liabilities of the trustees of the target trust.

Claiming the relief  

To claim this relief see the guidance How to make a LBTT return and pay tax.

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