In terms of the Scotland Act 2012, Stamp Duty Land Tax (SDLT) will not be chargeable in Scotland from 2015. Accordingly, the Scottish Government has recently consulted on a proposed Land and Buildings Transaction Tax to take its place in respect of property transactions.
The Land and Buildings Transaction Tax (Scotland) Bill has now been introduced into the Scottish Parliament and it is anticipated that it may complete its passage and be enacted during 2013, although the provisions will not come into force until 2015.
Scottish Land & Estates set up a specialist technical group to examine issues in the proposed Bill which may impact on members. This technical group will now monitor the passage of the Bill and report to members on matters of importance.
The stated objectives of the Scottish Government were to simplify the tax on property transactions, to make the tax less open to abuse and to ensure that the tax was more aligned to Scots property law and practice. As a result the Bill shows significant differences from the current SDLT. There is, as yet, no mention of when the rates of the new tax (LBTT) will be published.
Important points arising from the Bill include the following:
- While SDLT is a slab tax, LBTT will be a progressive tax with the intention of reducing avoidance. This may have the effect of increasing the rate of tax on higher value properties
- LBTT will be removed from low value residential property purchases
- LBTT will not be payable on the grant, assignation or renunciation of residential leases
- A working group will consider a simpler regime for non-residential leases. This will include agricultural, renewables, minerals and other commercial leases. Scottish Land & Estates lobbied for special consideration to be given to these given the complexity of some arrangements and will pay particular attention to the forthcoming discussions in this area
- Sub-sale relief is not mentioned in the Bill
- A proposal for a charge to LBTT on the transfer of shares in companies owning residential property
- A proposal to consider simplified rules on trusts and partnerships better to align with Scots Law
- A consultation on a General Anti-Avoidance Rule to replace the complex SDLT legislation.
The bill and supporting official papers can be accessed on the Scottish Parliament’s website at http://www.scottish.parliament.uk/parliamentarybusiness/Bills/56718.aspx
Scottish Land & Estates submission to the Consultation can be accessed at http://www.scottishlandandestates.co.uk/index.php?option=com_content&;;view=article&id=1740:consultation-response-taking-forward-a-scottish-land-a-buildings-transaction-tax&catid=121:taxation&Itemid=207