Land and Buildings Transaction Tax (Scotland) Act 2013

2013 asp 11

An Act of the Scottish Parliament to make provision about the taxation of land transactions.

The Bill for this Act of the Scottish Parliament was passed by the Parliament on 25th June 2013 and received Royal Assent on 31st July 2013C2 C1

Annotations:

Modifications etc. (not altering text)

Act excluded (1.4.2015) by The Land and Buildings Transaction Tax (Transitional Provisions) (Scotland) Order 2014 (S.S.I. 2014/377), arts. 1, 9

Act excluded (1.4.2015) by The Land and Buildings Transaction Tax (Transitional Provisions) (Scotland) Order 2014 (S.S.I. 2014/377), art. 6(2)

PART 1Land and buildings transaction tax

I291The tax

1

A tax (to be known as land and buildings transaction tax) is to be charged on land transactions.

2

The tax is chargeable—

a

whether or not there is an instrument effecting the transaction,

b

if there is such an instrument, whether or not it is executed in Scotland, and

c

whether or not any party to the transaction is present, or resident, in Scotland.

3

The Tax Authority is to be responsible for the collection and management of the tax.

I302Overview

This Act is arranged as follows—

Part 2 makes provision for the key concepts underlying the tax including—
1. a
  which transactions are land transactions,
2. b
  which interests are, and which are not, chargeable interests in land,
3. c
  when a chargeable interest is acquired and the treatment of transactions involving contracts which require to be completed by conveyance as well as other kinds of transaction,
4. d
  which land transactions are, and which are not, chargeable transactions,
5. e
  what is, and what is not, chargeable consideration in relation to a chargeable transaction,
Part 3 makes provision for—
1. a
  the amount of tax payable,
2. b
  relief from the tax, and
3. c
  who is liable to pay the tax,
Part 4 provides for returns relating to land transactions and for the payment of the tax,
Part 5 contains provision about the application of the Act in relation to certain types of buyer, including companies, partnerships and trusts,
Part 6 contains provision about the application of the Act to leases and non-residential licences,
Part 7 contains general provision, including provisions about the Tax Authority and definitions of expressions used in the Act,
Part 8 contains provisions on subordinate legislation powers and commencement as well as other final provisions.

PART 2Key concepts

CHAPTER 1Land transactions and chargeable interests

Land transaction

I313Land transaction

A land transaction is the acquisition of a chargeable interest.

Chargeable interest

I324Chargeable interest

1

A chargeable interest is an interest of a kind mentioned in subsection (2) which is not an exempt interest.

2

The interests are—

a

a real right or other interest in or over land in Scotland, or

b

the benefit of an obligation, restriction or condition affecting the value of any such right or interest.

3

In subsection (2), “land in Scotland” does not include land below mean low water mark.

the person ceases to be entitled to the interest on its being renounced or released, or

c

the person's interest or right is subject to or limited by the variation of the interest.

5

Except as otherwise provided, this Act applies however the acquisition is effected, whether by act of the parties, by order of a court or other authority, by or under any enactment or by operation of law.

I357Buyer and seller

1

The buyer, in relation to a land transaction, is the person who acquires the subject-matter of the transaction.

2

But a person is treated as the buyer only where that person has given consideration for, or is a party to, the transaction.

3

The seller, in relation to a land transaction, is the person who disposes of the subject-matter of the transaction.

CHAPTER 2Provision about particular transactions

General rules for contracts requiring conveyance

I368Contract and conveyance

1

sections 8 to 10 apply to that obligation as they apply to a contract for a land transaction that is to be completed by a conveyance.

9

Sections 8 to 10 apply in relation to any contract between B and C, in respect of the chargeable interest referred to in subsection (1), that is to be completed by a conveyance.

10

References to completion in sections 8 to 10, as they apply by virtue of subsection (9), include references to conveyance by A to C of the subject-matter of the contract between B and C.

Options etc.

I3712Options and rights of pre-emption

1

The acquisition of—

a

an option binding the grantor to enter into a land transaction, or

I4419Uncertain or unascertained consideration

3

In this section—

“company” means a body corporate,
“shares” includes stock and the reference to shares in a company includes reference to securities issued by a company.

4

Where this section applies, paragraph 1 of schedule 1 (exemption of transactions for which there is no chargeable consideration) does not apply.

5

But this section has effect subject to any other provision affording exemption or relief from the tax.

6

This section is subject to the exceptions provided for in section 23.

I4823Exceptions from deemed market value

1

Section 22 does not apply in the following cases.

2

In the following provisions “the company” means the company that is the buyer in relation to the transaction in question.

3

Case 1 is where immediately after the transaction the company holds the property as trustee in the course of a business carried on by it that consists of or includes the management of trusts.

4

Case 2 is where—

a

immediately after the transaction the company holds the property as trustee, and

b

the seller is connected with the company only because of section 1122(6) of the Corporation Tax Act 2010 (c.4).

5

Case 3 is where—

a

the seller is a company and the transaction is, or is part of, a distribution of the assets of that company (whether or not in connection with its winding up), and

b

it is not the case that—

i

the subject-matter of the transaction, or

ii

an interest from which that interest is derived,

has, within the period of 3 years immediately preceding the effective date of the transaction, been the subject of a transaction in respect of which group relief was claimed by the seller.

PART 3Calculation of tax and reliefs

I4925Amount of tax chargeable

1

The amount of tax chargeable in respect of a chargeable transaction is to be determined as follows.

Step 1 For each tax band applicable to the type of transaction, multiply so much of the chargeable consideration for the transaction as falls within the band by the tax rate for that band.
Step 2 Calculate the sum of the amounts reached under Step 1. The result is the amount of tax chargeable.

2

In the case of a transaction for which the whole or part of the chargeable consideration is rent this section has effect subject to schedule 19 (leases).

3

This section is subject to—

F51za

schedule 2A (additional amount: transactions relating to second homes etc. ),

a

schedule 5 (multiple dwellings relief),

b

schedule 9 (crofting community right to buy relief),

F26ba

schedule 10A (sub-sale development relief),

c

Part 3 of schedule 11 (acquisition relief).

I5026Amount of tax chargeable: linked transactions

1

Where a chargeable transaction is one of a number of linked transactions, the amount of tax chargeable in respect of the transaction is to be determined as follows.

Step 1 For each tax band applicable to the type of transaction, multiply so much of the relevant consideration as falls within the band by the tax rate for that band.
Step 2 Calculate the sum of the amounts reached under Step 1. The result is the total tax chargeable.
Step 3 Divide the chargeable consideration for the transaction by the relevant consideration.
Step 4 Multiply the total tax chargeable by the fraction reached under Step 3. The result is the amount of tax chargeable.

2

The relevant consideration is the total of the chargeable consideration for all the linked transactions.

3

In the case of a transaction for which the whole or part of the chargeable consideration is rent this section has effect subject to schedule 19 (leases).

4

This section is subject to—

F52za

schedule 2A (additional amount: transactions relating to second homes etc. ),

a

schedule 5 (multiple dwellings relief),

b

schedule 9 (crofting community right to buy relief),

c

Part 3 of schedule 11 (acquisition relief).

26AF59Additional amount: transactions relating to second homes etc.

Schedule 2A makes provision about an additional amount of tax chargeable in respect of certain chargeable transactions.

Reliefs

27Reliefs

I2 I111

The following schedules provide for reliefs from the tax in relation to certain land transactions—

schedule 3 (sale and leaseback relief),
schedule 4 (relief for certain acquisitions of residential property),
schedule 5 (multiple dwellings relief),
schedule 6 (relief for certain acquisitions by registered social landlords),
schedule 7 (alternative property finance relief),
schedule 8 (relief for alternative finance investment bonds),
schedule 9 (crofting community right to buy relief),
schedule 10 (group relief),
F30schedule 10A (sub-sale development relief),
schedule 11 (reconstruction relief and acquisition relief),
schedule 12 (relief for incorporation of limited liability partnership),
schedule 13 (charities relief),
F28schedule 13A (friendly societies relief),
schedule 13B (building societies relief),
schedule 14 (relief for certain compulsory purchases),
schedule 15 (relief for compliance with planning obligations),
schedule 16 (public bodies relief).
F29schedule 16A (visiting forces and international military headquarters reliefs),
schedule 16B (relief for property accepted in satisfaction of tax),
schedule 16C (lighthouses relief).

I132

Any relief under any of those schedules must be claimed in the first return made in relation to the transaction or in an amendment of that return.

F272A

For the period allowed for amendment of returns, see section 83 of the Revenue Scotland and Tax Powers Act 2014 (asp 16).

I33

The Scottish Ministers may, by order, modify this Act so as to—

a

add a relief,

b

modify an existing relief, or

c

remove a relief.

I34

An order under subsection (3) may also modify any other enactment that the Scottish Ministers consider appropriate.

Liability for tax

I5128Liability for tax

1

The buyer is liable to pay the tax in respect of a chargeable transaction.

2

As to the liability of buyers acting jointly, see—

a

section 48(2)(c) (joint buyers),

b

paragraph 3 of schedule 17 (partnerships), and

c

paragraphs 15 to 18 of schedule 18 (trusts).

PART 4Returns and payment

CHAPTER 1Returns

Duty to make return

I5229Duty to make return

I20 C1032Contingency ceases or consideration ascertained: less tax payable

1

The buyer in a land transaction may take one of the steps mentioned in subsection (2) to obtain a repayment of tax if—

a

section 18(2) or 19(2) (contingent, uncertain and unascertained consideration) applies in relation to the transaction (or to any transaction in relation to which it is a linked transaction),

b

an event mentioned in section 31(2) occurs, and

c

the effect of the event is that less tax is payable in respect of the transaction than has already been paid.

2

The steps are—

a

within the period allowed for amendment of the land transaction return, amend the return accordingly,

b

after the end of that period (if the land transaction return is not so amended), make a claim to the Tax Authority F32under section 107 of the Revenue Scotland and Tax Powers Act 2014 (asp 16) for repayment of the amount overpaid.

F312A

For the period allowed for amendment of returns, see section 83 of the Revenue Scotland and Tax Powers Act 2014 (asp 16).

3

This section does not apply so far as the consideration consists of rent (see schedule 19 (leases)).

I5433Further return where relief withdrawn

1

The buyer in a land transaction must make a further return to the Tax Authority if relief is withdrawn to any extent under—

a

Part 5 of schedule 4 (relief for certain acquisitions of residential property),

b

Part 5 of schedule 5 (transfer of multiple dwellings),

c

Part 4 of schedule 8 (relief for alternative finance investment bonds),

d

Part 3 of schedule 10 (group relief),

F33da

Part 3 of schedule 10A (sub-sale development relief),

e

Part 4 of schedule 11 (reconstruction relief and acquisition relief), or

f

paragraph 4 of schedule 13 (charities relief).

2

The return must include an assessment of the amount of tax that, on the basis of the information contained in the return, is chargeable.

3

The return must be made before the end of the period of 30 days beginning with the day after the date on which the relevant event occurred.

4

The relevant event is—

a

in relation to the withdrawal of relief under schedule 4, an event mentioned in paragraph 14(a), (b) or (c) or 16(a), (b) or (c) of that schedule,

b

in relation to the withdrawal of relief under schedule 5, an event mentioned in paragraph 16(a) or 18(a) of that schedule,

c

in relation to the withdrawal of relief under schedule 8, an event mentioned in paragraph 16 of that schedule,

d

in relation to the withdrawal of group relief, the buyer ceasing to be a member of the same group as the seller within the meaning of schedule 10,

F34da

in relation to the withdrawal of sub-sale development relief, the end of the relevant period within the meaning of paragraph 4(3) of schedule 10A,

e

in relation to the withdrawal of reconstruction relief or acquisition relief, the change of control of the acquiring company mentioned in paragraph 13 of schedule 11,

f

in relation to the withdrawal of charities relief, a disqualifying event as defined in paragraphs 5 and 6 of schedule 13.

I5534Return or further return in consequence of later linked transaction

I5636Declaration

1

A return under this Act must also include a declaration by the buyer that the return is, to the best of the buyer's knowledge, correct and complete.

2

However, where the buyer authorises an agent to complete the return—

a

the agent must certify in the return that the buyer has declared that the information provided in the return, with the exception of the relevant date, is to the best of the buyer's knowledge, correct and complete, and

b

the return must include a declaration by the agent that the relevant date provided in the return is, to the best of the agent's knowledge, correct.

3

The relevant date is—

a

in relation to a return under section 29, the effective date of the transaction,

b

in relation to a return under section 31, the date of the event as a result of which the return is required,

c

in relation to a return under section 33, the date on which the relevant event occurred,

d

in relation to a return under section 34, the effective date of the later transaction,

e

in relation to a return under paragraph 10 of schedule 19 (leases), the review date (see paragraph 10(7)),

f

in relation to a return under paragraph 11 of that schedule, the day on which the lease is assigned or terminated,

g

in relation to a return under paragraph 20 of that schedule, the date on which the 1 year period mentioned in paragraph 20(3) ended,

h

in relation to a return under paragraph 22 of that schedule, the date on which the deemed fixed term mentioned in paragraph 22(2) ended,

i

in relation to a return under paragraph 30 of that schedule, the date from which the variation mentioned in that paragraph takes effect.

F3537Amendment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37AF3Communications from taxpayers to the Tax Authority

1

Any notice, application or other thing that a person is required or permitted by provision made in or under this Act to give to the Tax Authority must comply with the requirements set out in subsection (2).

2

The requirements are that the thing—

a

must be in the form specified by the Tax Authority,

b

must contain the information specified by the Tax Authority, and

c

must be given in the manner specified by the Tax Authority.

3

Subsections (1) and (2) are subject to any different provision made in or under this Act.

Miscellaneous

I5738Interpretation

References in this Act to the making of a return are to the making of a return that—

a

complies with the requirements of sections 35 and 36, and

b

contains an assessment of the tax chargeable in respect of the transaction (if one is required).

I5839Power to amend period in which returns must be made

1

The Scottish Ministers may, by order, amend a provision listed in subsection (2) so as to substitute, for the period for the time being specified there, a different period.

2

The provisions are—

a

section 29(3),

b

section 31(3),

c

section 33(3),

d

in schedule 19 (leases)—

i

paragraph 10(3),

ii

paragraph 11(3),

iii

paragraph 20(3)(a),

iv

paragraph 22(2)(a),

v

paragraph 30(2)(a).

CHAPTER 2Payment of tax

I5940Payment of tax

1

Tax payable in respect of a land transaction must be paid to the Tax Authority.

2

Where a return is to be made under any of the following provisions, the tax or additional tax payable must be paid at the same time as the return is made—

a

section 29 (land transaction return),

b

section 31 (return where contingency ceases or consideration ascertained),

c

section 33 (further return where relief withdrawn),

d

section 34 (return or further return in consequence of later linked transaction), or

e

in schedule 19 (leases)—

i

paragraph 10 (return on 3-yearly review),

ii

paragraph 11 (return on assignation or termination of lease),

iii

paragraph 20 (return where lease for fixed term continues after end of term),

iv

paragraph 22 (return in relation to lease for indefinite term),

v

paragraph 30 (transactions which become notifiable on variation of rent or term).

3

Tax payable as a result of the amendment of a return must be paid at the same time as the amendment is made.

4

For the purposes of subsections (2) and (3), tax is treated as paid if arrangements satisfactory to the Tax Authority are made for payment of the tax.

5

This section is subject to section 41 (application to defer payment of tax in case of contingent or uncertain consideration).

I2241Application to defer payment in case of contingent or uncertain consideration

1

The buyer may apply to the Tax Authority to defer payment of tax in a case where—

a

the amount of tax payable depends on the amount or value of chargeable consideration that, at the effective date of the transaction, is contingent or uncertain, and

b

the chargeable consideration falls to be paid or provided on one or more future dates of which at least one falls, or may fall, more than 6 months after the effective date of the transaction.

F62

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

An application under this section does not affect the buyer's obligations as regards payment of tax in respect of chargeable consideration that—

a

has already been paid or provided at the time the application is made, or

b

is not contingent and whose amount is ascertained or ascertainable at the time the application is made.

4

Subsection (3) applies as regards both the time of payment and the calculation of the amount payable.

5

Unless the Scottish Ministers provide otherwise by order, this section does not apply to consideration so far as it consists of rent.

I442Regulations about applications under section 41

a

a company,

b

an unincorporated association.

I1545Unit trust schemes

1

This Act (with the exception of the provisions mentioned in subsection (8)) applies in relation to a unit trust scheme as if—

a

the trustees were a company, and

b

the rights of the unit holders were shares in the company.

2

Each of the parts of an umbrella scheme is regarded for the purposes of this Act as a separate unit trust scheme and the umbrella scheme as a whole is not so regarded.

3

An “umbrella scheme” means a unit trust scheme—

a

that provides arrangements for separate pooling of the contributions of participants and the profits or income out of which payments are to be made for them, and

b

under which the participants are entitled to exchange rights in one pool for rights in another.

4

A “part” of an umbrella scheme means such of the arrangements as relate to a separate pool.

5

In this Act—

“unit trust scheme” has the same meaning as in the Financial Services and Markets Act 2000 (c.8), and
“unit holder” means a participant in a unit trust scheme.

6

The Scottish Ministers may, by regulations, provide that a scheme of a description specified in the regulations is to be treated as not being a unit trust scheme for the purposes of this Act.

7

Section 620 of the Corporation Tax Act 2010 (c.4) (court investment funds treated as authorised unit trusts) applies for the purposes of this Act as it applies for the purposes of that Act, with the substitution for references to an authorised unit trust of references to a unit trust scheme.

8

A unit trust scheme is not to be treated as a company for the purposes of schedules 10 (group relief) and 11 (reconstruction relief and acquisition relief).

I6246Open-ended investment companies

1

The Scottish Ministers may, by regulations, make such provision as they consider appropriate for securing that the provisions of this Act have effect in relation to—

a

open-ended investment companies of such description as may be prescribed in the regulations, and

b

transactions involving such companies,

in a manner corresponding, subject to such modifications as the Scottish Ministers consider appropriate, to the manner in which they have effect in relation to unit trust schemes and transactions involving such trusts.

2

The regulations may, in particular, make provision—

a

modifying the operation of any provision in relation to open-ended investment companies so as to secure that arrangements for treating the assets of such a company as assets comprised in separate pools are given an effect corresponding to that of equivalent arrangements constituting the separate parts of an umbrella scheme,

b

treating the separate parts of the undertaking of an open-ended investment company in relation to which such provision is made as distinct companies for the purposes of this Act.

3

In this section—

“open-ended investment company” has the meaning given by section 236 of the Financial Services and Markets Act 2000 (c.8),
“umbrella scheme” has the same meaning as in section 45.

Regulations under subsection (1) may also provide that, for the purposes of this section, “residential property” includes such other kinds of property as may be specified in the regulations.

7

Regulations under subsection (1) may modify any enactment (including this Act).

I2348Joint buyers

I6449Partnerships

1

Schedule 17 makes provision about the application of this Act in relation to partnerships.

2

The Scottish Ministers may, by regulations, modify schedule 17.

I2450Trusts

1

Schedule 18 makes provision about the application of this Act in relation to trusts.

2

The Scottish Ministers may, by regulations, modify schedule 18.

F373

See also section 248 of the Revenue Scotland and Tax Powers Act 2014 (asp 16) (reviews, appeals etc.: trustees).

I6551Persons acting in a representative capacity etc.

1

The personal representatives of a person who is the buyer in a land transaction—

a

are responsible for discharging the obligations of the buyer under this Act in relation to the transaction, and

b

may deduct any payment made by them under this Act out of the assets and effects of the deceased person.

2

A receiver appointed by a court in the United Kingdom having the direction and control of any property is responsible for discharging any obligations under this Act in relation to a transaction affecting that property as if the property were not under the direction and control of the court.

PART 6Application of Act to leases and licences

Leases

52Application of this Act to leases

I5 I121

Schedule 19 makes provision about the application of this Act to chargeable transactions involving leases, including provision for the calculation of the tax chargeable in relation to such transactions.

I142

The Scottish Ministers may, by regulations, modify schedule 19.

Licences

I653Application of this Act to licences

1

The Scottish Ministers may, by regulations, prescribe descriptions of non-residential licences to occupy property, transactions in relation to which are to be land transactions for the purposes of this Act.

2

The regulations may also make provision, among other things—

a

for transactions, which result in the acquisition of interests in licences, to be land transactions,

b

for what the chargeable consideration is to be in relation to a licence,

c

for the determination of the amount or value of that chargeable consideration,

d

for the calculation of the tax chargeable,

e

specifying that certain land transactions relating to a licence are not to be notifiable under section 30.

3

Regulations under this section may modify any enactment (including this Act).

PART 7General and interpretation

The Tax Authority

54The Tax Authority

1

For the purposes of this Act, the Tax Authority is F1Revenue Scotland .

F22

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1355Delegation of functions to Keeper

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3856Review and appeal

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Linked transactions

I6657Linked transactions

1

Transactions are linked for the purposes of this Act if they form part of a single scheme, arrangement or series of transactions between the same seller and buyer or, in either case, persons connected with them.

2

Where there are two or more linked transactions with the same effective date, the buyer, or all of the buyers if there is more than one, may make a single return as if all of those transactions that are notifiable were a single notifiable transaction.

3

Where two or more buyers make a single return in respect of linked transactions, section 48 applies as if—

a

the transaction in question were a single transaction, and

b

those buyers were buyers acting jointly.

4

This section is subject to section 13(1) (exchanges).

Connected persons

I6861Meaning of “subject-matter” and “main subject-matter”

References in this Act to the subject-matter of a land transaction or a contract are to the chargeable interest acquired (the “main subject-matter”) by virtue of the transaction or contract, together with any interest or right pertaining to it that is acquired with it.

I1662Meaning of “market value”

For the purpose of this Act “market value” is to be determined as for the purposes of the Taxation of Chargeable Gains Act 1992 (c.12) (see sections 272 to 274 of that Act).

I2563Meaning of “effective date” of a transaction

1

Except as otherwise provided, the effective date of a land transaction for the purposes of this Act is—

a

the date of completion, or

b

such alternative date as the Scottish Ministers may prescribe by regulations.

2

Other provision as to the effective date of certain land transactions is made by—

a

section 10(2) (substantial performance of contract without F7completion),

b

section 11(4) (substantial performance of contract requiring conveyance to third party),

c

section 12(4) (options and rights of pre-emption), and

d

paragraph 25(2) of schedule 19 (agreement for lease substantially performed etc.).

I6964Meaning of “completion”

1

In this Act, “completion” means—

a

in relation to a lease, when it is executed by the parties or constituted by any means,

b

in relation to any other transaction, the settlement of the transaction.

2

References to completion are to completion of the land transaction proposed, between the same parties, in substantial conformity with the contract.

I7065General interpretation

In this Act—

“acquisition relief” means relief under Part 3 of schedule 11,
“charities relief” means relief under schedule 13,
“company” means (except as otherwise expressly provided) a body corporate other than a partnership,
“contract” includes any agreement,
“conveyance” includes any instrument,
“employee” includes an office-holder and related expressions have a corresponding meaning,
“group relief” means relief under schedule 10,
“jointly entitled” means entitled as joint owners or common owners,
“land transaction return” means a return under section 29(1),
“personal representatives”, in relation to a person, include that person's executors,
“reconstruction relief” means relief under Part 2 of schedule 11,
“registered social landlord” means a body registered in the register maintained under section 20(1) of the Housing (Scotland) Act 2010 (asp 17),
F40sub-sale development relief” means relief under schedule 10A,
“the tax” means land and buildings transaction tax.

I7166Index of defined expressions

Schedule 20 contains an index of expressions defined or otherwise explained in this Act.

PART 8Final provisions

Ancillary provision

67Ancillary provision

Crown application

69Crown application

Nothing in this Act affects Her Majesty in Her private capacity.

Commencement and short title

70Commencement

1

This section and sections 54,F14... 67, 68, 69 and 71 come into force on the day of Royal Assent.

2

The other provisions of this Act come into force on such day as the Scottish Ministers may, by order, appoint.

3

An order under subsection (2) may contain such transitional, transitory or saving provision as the Scottish Ministers consider necessary or expedient.

71Short title

The short title of this Act is the Land and Buildings Transaction Tax (Scotland) Act 2013.

SCHEDULE 1Exempt transactions

(introduced by section 16)

No chargeable consideration

I981

A land transaction is an exempt transaction if there is no chargeable consideration for the transaction.

Acquisitions by the Crown

I992

A land transaction under which the buyer is any of the following is an exempt transaction—

a

the Scottish Ministers,

b

the Scottish Parliamentary Corporate Body,

c

a Minister of the Crown,

d

the Corporate Officer of the House of Lords,

e

the Corporate Officer of the House of Commons,

f

a Northern Ireland department,

g

the Northern Ireland Assembly Commission,

h

the Welsh Ministers, the First Minister for Wales and the Counsel General to the Welsh Assembly Government,

i

the National Assembly for Wales Commission,

j

the National Assembly for Wales.

Residential leases and licences

I1003

c

in pursuance of—

i

an order of a court made at any time under any provision of schedule 5 to the Civil Partnership Act 2004 (c.33) that corresponds to section 22A, 23A or 24A of the Matrimonial Causes Act 1973 (c.18), or

ii

an incidental order of a court made under any provision of the Civil Partnership Act 2004 (c.33) that corresponds to section 8(2) of the Family Law (Scotland) Act 1985 (c.37) by virtue of section 14(1) of that Act of 1985,

d

at any time in pursuance of an agreement of the parties made in contemplation or otherwise in connection with the dissolution or annulment of the civil partnership, their judicial separation or the making of a separation order in respect of them.

Assents and appropriations by personal representatives

I1036

1

The acquisition of property by a person in or towards satisfaction of the person's entitlement under or in relation to the will of a deceased person, or on the intestacy of a deceased person, is an exempt transaction.

2

Sub-paragraph (1) does not apply if the person acquiring the property gives any consideration for it, other than the assumption of secured debt.

3

Where sub-paragraph (1) does not apply because of sub-paragraph (2), the chargeable consideration for the transaction is determined in accordance with paragraph 9(1) of schedule 2.

4

In this paragraph—

“debt” means an obligation, whether certain or contingent, to pay a sum of money either immediately or at a future date, and
“secured debt” means debt that, immediately after the death of the deceased person, is secured on the property.

Variation of testamentary dispositions etc.

I1047

1

A transaction following a person's death that varies a disposition (whether effected by will, under the law relating to intestacy or otherwise) of property of which the deceased was competent to dispose is an exempt transaction if the following conditions are met.

2

The conditions are—

a

that the transaction is carried out within the period of 2 years after a person's death, and

b

that no consideration in money or money's worth other than the making of a variation of another such disposition is given for it.

3

Where the condition in sub-paragraph (2)(b) is not met, the chargeable consideration for the transaction is determined in accordance with paragraph 9(3) of schedule 2.

4

This paragraph applies whether or not the administration of the estate is complete or the property has been distributed in accordance with the original dispositions.

Power to add, vary or remove exemptions

I1058

The Scottish Ministers may, by regulations, modify this schedule so as to—

a

add a description of land transaction as an exempt transaction,

b

provide that a description of land transaction is no longer an exempt transaction,

c

vary a description of an exempt transaction.

SCHEDULE 2Chargeable consideration

(introduced by section 17)

Money or money's worth

I1061

The chargeable consideration for a transaction is, except as otherwise provided, any consideration in money or money's worth given for the subject-matter of the transaction, directly or indirectly, by the buyer or a person connected with the buyer.

Value added tax

I1072

The chargeable consideration for a transaction includes any value added tax chargeable in respect of the transaction, other than value added tax chargeable by virtue of an option to tax any land under Part 1 of schedule 10 to the Value Added Tax Act 1994 (c.23) made after the effective date of the transaction.

Postponed consideration

I1083

The amount or value of the chargeable consideration for a transaction is to be determined without any discount for postponement of the right to receive it or any part of it.

Just and reasonable apportionment

I1094

1

For the purposes of this Act consideration attributable—

a

to two or more land transactions, or

b

in part to a land transaction and in part to another matter, or

c

in part to matters making it chargeable consideration and in part to other matters,

is to be apportioned on a just and reasonable basis.

2

If the consideration is not so apportioned, this Act has effect as if it had been so apportioned.

3

For the purposes of this paragraph any consideration given for what is in substance one bargain is to be treated as attributable to all the elements of the bargain, even though—

a

separate consideration is, or purports to be, given for different elements of the bargain, or

b

there are, or purport to be, separate transactions in respect of different elements of the bargain.

Exchanges

I1105

1

This paragraph applies to determine the chargeable consideration where one or more land transactions are entered into by a person as buyer (alone or jointly) wholly or partly in consideration of one or more other land transactions being entered into by that person (alone or jointly) as seller.

2

In this paragraph—

“relevant acquisition” means a relevant transaction entered into as buyer,
“relevant disposal” means a relevant transaction entered into as seller, and
“relevant transaction” means any of those transactions.

b

where two or more relevant acquisitions are made in consideration of one or more relevant disposals, the chargeable consideration for each relevant acquisition is the appropriate proportion of the amount or value of any chargeable consideration other than the disposal or disposals that are given for the acquisitions.

6

For the purposes of sub-paragraph (5)(b) the appropriate proportion is—

\frac{MV}{TMV}

where—

MV is the market value of the subject-matter of the acquisition for which the chargeable consideration is being determined, and

TMV is the total market value of the subject-matter of all the relevant acquisitions.

7

This paragraph is subject to paragraph 6 (partition etc.: disregard of existing interests).

8

This paragraph does not apply in a case to which paragraph 17 (arrangements involving public or educational bodies) applies.

Partition etc.: disregard of existing interest

I1116

In the case of a land transaction giving effect to a partition or division of a chargeable interest to which persons are jointly entitled, the share of the interest held by the buyer immediately before the partition or division does not count as chargeable consideration.

Valuation of non-monetary consideration

I1127

Except as otherwise expressly provided, the value of any chargeable consideration for a land transaction, other than—

a

money (whether in sterling or another currency), or

b

debt as defined for the purposes of paragraph 8 (debt as consideration),

is to be taken to be its market value at the effective date of the transaction.

Debt as consideration

the amount of secured debt assumed is to be determined as if the amount of that debt owed by each of those persons at a given time were the proportion of it corresponding to the person's undivided share of the property at that time.

4

If the effect of this paragraph would be that the amount of the chargeable consideration for the transaction exceeded the market value of the subject-matter of the transaction, the amount of the chargeable consideration is treated as limited to that value.

5

In this paragraph—

“debt” has the same meaning as in paragraph 6(4) of schedule 1,
“existing debt”, in relation to a transaction, means debt created or arising before the effective date of, and otherwise than in connection with, the transaction, and
references to the amount of a debt are to the principal amount payable or, as the case may be, the total of the principal amounts payable, together with the amount of any interest that has accrued due on or before the effective date of the transaction.

Cases where conditions for exemption not fully met

I1149

1

Where a land transaction would be an exempt transaction under paragraph 6 of schedule 1 (assents and appropriations by personal representative) but for sub-paragraph (2) of that paragraph (cases where person acquiring property gives consideration for it), the chargeable consideration for the transaction does not include the amount of any secured debt assumed.

2

In this paragraph, “secured debt” has the same meaning as in paragraph 6(4) of schedule 1.

3

Where a land transaction would be an exempt transaction under paragraph 7 of schedule 1 (variation of testamentary dispositions etc.) but for a failure to meet the condition in sub-paragraph (2)(b) of that paragraph (no consideration other than variation of another disposition), the chargeable consideration for the transaction does not include the making of any such variation as is mentioned in that sub-paragraph.

Conversion of amounts in foreign currency

I11510

Provision of services

I11712

1

Where the whole or part of the consideration for a land transaction consists of the provision of services (other than the carrying out of works to which paragraph 11 applies), the value of that consideration is to be taken to be the amount that would have to be paid in the open market to obtain those services.

2

This paragraph is subject to paragraph 17 (arrangements involving public or educational bodies).

Land transaction entered into by reason of employment

I11813

Where a land transaction is entered into by reason of the buyer's employment, or that of a person connected with the buyer, the consideration for the transaction is to be taken to be not less than the market value of the subject-matter of the transaction as at the effective date of the transaction.

Indemnity given by buyer

I11914

Where the buyer agrees to indemnify the seller in respect of liability to a third party arising from breach of an obligation owed by the seller in relation to the land that is the subject of the transaction, neither the agreement nor any payment made in pursuance of it counts as chargeable consideration.

Buyer bearing inheritance tax liability

I12015

Where—

a

there is a land transaction that is—

i

a transfer of value within section 3 of the Inheritance Tax Act 1984 (c.51) (transfers of value), or

ii

a disposition, effected by will or under the law of intestacy, of a chargeable interest comprised in the estate of a person immediately on the person's death, and

b

the buyer is or becomes liable to pay, agrees to pay or does in fact pay any inheritance tax due in respect of the transfer or disposition,

the buyer's liability, agreement or payment does not count as chargeable consideration for the transaction.

Buyer bearing capital gains tax liability

I8016

1

Where—

a

there is a land transaction under which the chargeable interest in question—

i

is acquired otherwise than by a bargain made at arm's length, or

ii

is treated by section 18 of the Taxation of Chargeable Gains Act F101992 (c.12) (connected persons) as so acquired, and

b

the buyer is or becomes liable to pay, or does in fact pay, any capital gains tax due in respect of the corresponding disposal of the chargeable interest,

the buyer's liability or payment does not count as chargeable consideration for the transaction.

2

Sub-paragraph (1) does not apply if there is chargeable consideration for the transaction (disregarding the liability or payment referred to in sub-paragraph (1)(b)).

Arrangements involving public or educational bodies

I9117

1

This paragraph applies in any case where arrangements are entered into under which—

a

there is a transfer of the ownership, or the grant or assignation of a lease, of land by a qualifying body (A) to a non-qualifying body (B) (“the main transfer”),

b

in consideration (whether in whole or in part) of the main transfer there is a grant by B to A of a lease or sub-lease of the whole, or substantially the whole, of that land (“the leaseback”),

c

B undertakes to carry out works or provide services to A, and

d

c

the consideration in money paid by A to B for the building works or other services referred to in sub-paragraph (4).

6

Sub-paragraphs (4) and (5) are to be disregarded for the purposes of determining whether the land transaction in question is notifiable.

F58SCHEDULE 2AADDITIONAL AMOUNT: TRANSACTIONS RELATING TO SECOND HOMES ETC.

(introduced by section 26A)

Annotations:

Amendments (Textual)

F58

Sch. 2A inserted (1.4.2016) by Land and Buildings Transaction Tax (Amendment) (Scotland) Act 2016 (asp 11), ss. 1(3), 5(2) (with s. 3)

PART 1OVERVIEW

Overview

1

This schedule makes provision about an additional amount of tax chargeable in respect of certain chargeable transactions.

2

It is arranged as follows—

Part 2 identifies the transactions to which this schedule applies,
Part 3 sets out the additional amount of tax,
Part 4 contains provision about the application of this schedule in relation to certain types of buyer,
Part 5 provides for repayment of and relief from the additional amount of tax in certain cases,
Part 6 contains special rules about the meaning of ownership of dwellings for the purposes of this schedule,
Part 7 contains general provision including powers to modify this schedule.

PART 2TRANSACTIONS TO WHICH THIS SCHEDULE APPLIES

Transactions relating to second homes etc.

2

5

This sub-paragraph applies if the individual is making the acquisition as trustee under a settlement and, in relation to any dwelling that is or forms part of the subject-matter of the transaction, there is no interested beneficiary.

6

For the purposes of sub-paragraph (5), a beneficiary under the settlement is an interested beneficiary in relation to a dwelling if the beneficiary has or will have a relevant interest in the dwelling.

PART 3THE ADDITIONAL AMOUNT

Additional amount

4

1

Where this schedule applies to a chargeable transaction, the amount of tax chargeable in respect of the transaction (as determined under section 25(1) or 26(1)) is increased by the additional amount.

2

The additional amount is an amount equal to 3% of the relevant consideration.

3

The relevant consideration is—

a

in a case where the transaction is a residential property transaction, the chargeable consideration for the transaction, or

b

in a case where the transaction is a non-residential property transaction, so much of the chargeable consideration for the transaction as is attributable, on a just and reasonable apportionment, to the acquisition of ownership of the dwelling (including any interest or right pertaining to ownership of the dwelling) that is or forms part of the subject-matter of the transaction.

4

In the case of a chargeable transaction to which this schedule applies by virtue of paragraph 2(1)(d)(ii), the relevant consideration is to exclude so much of the chargeable consideration as is attributable, on a just and reasonable apportionment, to the acquisition of ownership of the dwelling (including any interest or right pertaining to ownership of the dwelling) that the buyer intends to occupy as the buyer's only or main residence.

PART 4CERTAIN TYPES OF BUYER

Joint buyers

5

1

This paragraph applies to a chargeable transaction which satisfies the conditions in paragraph 2(1)(a) and (b) or 3(1)(a) and (b) if there are two or more buyers who are or will be jointly entitled to ownership of the dwelling.

2

The conditions set out in paragraph 2(1)(c) and (d) or, as the case may be, 3(1)(c) are satisfied if they are satisfied in relation to any one of, or more than one of, the buyers.

Spouses, civil partners, cohabitants and children

6

1

For the purposes of paragraph 2(1)(c), a dwelling which is owned by—

a

the buyer's spouse or civil partner,

b

the buyer's cohabitant,

c

a person aged under 16 who is a child of—

i

the buyer,

ii

the buyer's spouse or civil partner, or

iii

the buyer's cohabitant,

is to be treated as being owned by the buyer.

2

Sub-paragraphs (1)(a) and (1)(c)(ii) do not apply if the buyer and the buyer's spouse or civil partner have separated.

3

For the purposes of sub-paragraph (2), the parties have separated if—

a

they no longer live together, and

b

they do not intend to live together again.

4

For the purposes of sub-paragraphs (1)(b) and (1)(c)(iii), a person is the buyer's cohabitant if the two of them live together as though married to one another.

Trustees in certain trusts

7

1

This paragraph applies to a chargeable transaction which satisfies the conditions in paragraph 2(1)(a) and (b) if—

a

the buyer is acting as trustee of a settlement, and

b

a beneficiary under the settlement has or will have a relevant interest in a dwelling that is or forms part of the subject-matter of the transaction.

2

In paragraphs 2(1)(c) and (d), 2(2)(b) and (c), 5, 6 and 8(1)(b) and (c), references to the buyer are to be read as if they were references to the beneficiary.

3

In paragraphs 2(2)(a) and 8(1)(a), references to the buyer are to be read as including references to the beneficiary.

PART 5REPAYMENT OF AND RELIEF FROM THE ADDITIONAL AMOUNT

Repayment of additional amount in certain cases

8

b

the references in sub-paragraph (1)(b) and (c) of that paragraph to the buyer were references to both of the buyers together.

3

For the purposes of sub-paragraph (1)(b)(i), two buyers are cohabitants if they live together as though married to one another.

Relief for purchases of 6 or more dwellings

9

A chargeable transaction is exempt from the additional amount if it is a transaction to which section 59(8) applies.

Relief for spouses, civil partners and cohabitants replacing main residence

9A

1

A chargeable transaction to which this schedule applies by virtue of paragraph 2 is exempt from the additional amount if—

a

there are only two buyers,

b

the buyers—

i

are (in relation to each other) spouses, civil partners or cohabitants, and

ii

are or will be jointly entitled to ownership of the dwelling that is or forms part of the subject-matter of the transaction, and

c

paragraph 2(2) would apply if—

i

the reference in paragraph (a) of that paragraph to the buyer were a reference to either of the buyers, and

ii

the references in paragraphs (b) and (c) of that paragraph to the buyer were references to both of the buyers together.

2

For the purposes of sub-paragraph (1)(b)(i), two buyers are cohabitants if they live together as though married to one another.

Relief: supplemental

10

1

A relief under paragraph 9 must be claimed in the first return made in relation to the transaction or in an amendment of that return.

2

For the period allowed for amendment of returns, see section 83 of the Revenue Scotland and Tax Powers Act 2014.

PART 6OWNERSHIP OF DWELLINGS

What counts as a dwelling owned by a person?

11

Dwellings outside Scotland: what counts as “ownership”

18

1

In the case of a dwelling situated outside Scotland, a person owns the dwelling for the purposes of this schedule if the person has an interest in it that is equivalent to ownership in Scotland.

2

References in this schedule to “ownership” and “acquisition of ownership” are to be read accordingly.

PART 7GENERAL PROVISION

Power of Scottish Ministers to modify schedule

19

1

The Scottish Ministers may by order amend paragraph 4(2) so as to substitute, for the percentage figure for the time being specified there, a different percentage figure.

2

The Scottish Ministers may by order amend paragraph 2(1)(b), 3(1)(b) or 11(4) so as to substitute, for the figure for the time being specified there, a different figure.

3

The Scottish Ministers may by order modify this schedule so as to make provision for or about reliefs from the additional amount and, in particular, may—

a

add a relief,

b

modify any relief,

c

remove any relief.

4

The Scottish Ministers may by regulations modify the following provisions of this schedule—

a

Parts 2 (except paragraphs 2(1)(b) and 3(1)(b)) and 4 so far as relating to the application of this schedule in relation to—

i

partnerships,

ii

trusts,

b

Part 6 (except paragraph 11(4)),

c

paragraph 20.

5

An order under sub-paragraph (3) may modify any other enactment that the Scottish Ministers consider appropriate.

Interpretation

20

1

In this schedule—

“bare trust” has the meaning given in paragraph 19 of schedule 18,
“relevant consideration” is to be construed in accordance with paragraph 4(3) and (4),
“settlement”, except in paragraph 12(5)(b), has the meaning given in paragraph 21 of schedule 18.

2

Part 6 of schedule 5 (what counts as a “dwelling”) applies for the purposes of this schedule as it applies for the purposes of schedule 5.

3

For the purposes of this schedule, a beneficiary under a settlement has a relevant interest in a dwelling that is or forms part of the trust property or the subject-matter of a transaction if the beneficiary is entitled to—

a

occupy the dwelling for life, or

b

income (whether net or gross) in respect of the dwelling.

SCHEDULE 3Sale and leaseback relief

(introduced by section 27)

The relief

I1211

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

Sale and leaseback arrangements

I1222

A sale and leaseback arrangement is an arrangement under which—

a

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

b

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

Qualifying conditions

I1233

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 (whether in sterling or another currency) or the assumption, satisfaction or release of a debt (or both), and

c

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 schedule 10) at that date.

Interpretation

I1244

In this schedule, “debt” has the same meaning as in paragraph 6(4) of schedule 1.

SCHEDULE 4Relief for certain acquisitions of residential property

(introduced by section 27)

PART 1Introductory

Overview of reliefs

I1251

1

This schedule provides for relief in the case of certain acquisitions of residential property.

2

It is arranged as follows—

Part 2 provides for relief in the case of an acquisition by a house-building company from an individual acquiring a new dwelling,
Part 3 provides for relief in the case of an acquisition by a property trader from an individual acquiring a new dwelling,
Part 4 provides for relief in the case of an acquisition by a property trader from an individual where a chain of transactions breaks down,
Part 5 provides for the withdrawal of those reliefs in certain circumstances,
Part 6 defines expressions used in this schedule.

PART 2Acquisition by house-building company from individual acquiring new dwelling

Full relief

I1262

Where a dwelling (“the old dwelling”) is acquired by a house-building company from an individual (whether alone or with other individuals), the acquisition is exempt from charge if the qualifying conditions are met.

Partial relief

I1273

Where qualifying conditions (a) to (d) but not (e) are met, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the old dwelling.

Qualifying conditions

I1284

In this Part of this schedule, the qualifying conditions are—

a

that the individual (whether alone or with other individuals) acquires a new dwelling from the house-building company,

b

that the individual occupied the old dwelling as the individual's only or main residence at some time in the period of 2 years ending with the date of its acquisition,

c

that the individual intends to occupy the new dwelling as the individual's only or main residence,

d

that each acquisition is entered into in consideration of the other, and

e

that the area of land acquired by the house-building company does not exceed the permitted area.

PART 3Acquisition by property trader from individual acquiring new dwelling

Full relief

I1295

Where a dwelling (“the old dwelling”) is acquired by a property trader from an individual (whether alone or with other individuals), the acquisition is exempt from charge if the qualifying conditions are met.

Partial relief

I1306

Where qualifying conditions (a) to (e) but not (f) are met, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the old dwelling.

Qualifying conditions

I1317

In this Part of this schedule, the qualifying conditions are—

a

that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals who acquire new dwellings from house-building companies,

b

that the individual (whether alone or with other individuals) acquires a new dwelling from a house-building company,

c

that the individual occupied the old dwelling as the individual's only or main residence at some time in the period of 2 years ending with the date of its acquisition,

d

that the individual intends to occupy the new dwelling as the individual's only or main residence,

e

that the property trader does not intend—

i

to spend more than the permitted amount on refurbishment of the old dwelling,

ii

to grant a lease or licence of the old dwelling, or

iii

to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling, and

f

that the area of land acquired by the property trader does not exceed the permitted area.

I1328

Paragraph 7(e)(ii) does not apply to the grant of a lease or licence to the individual for a period of no more than 6 months.

PART 4Acquisition by property trader from individual where chain of transactions breaks down

Full relief

I1339

Partial relief

I13410

Where qualifying conditions (a) to (g) but not (h) are met, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the old dwelling.

Qualifying conditions

I13511

In this Part of this schedule, the qualifying conditions are—

a

that the individual has made arrangements to sell the old dwelling and acquire another dwelling (“the second dwelling”),

b

that the arrangements to sell the old dwelling fail,

c

that the acquisition of the old dwelling is made for the purpose of enabling the individual's acquisition of the second dwelling to proceed,

d

that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals in the circumstances mentioned in conditions (a) to (c),

e

that the individual occupied the old dwelling as the individual's only or main residence at some time in the period of 2 years ending with the date of its acquisition,

f

that the individual intends to occupy the second dwelling as the individual's only or main residence,

g

that the property trader does not intend—

i

to spend more than the permitted amount on refurbishment of the old dwelling,

ii

to grant a lease or licence of the old dwelling, or

iii

to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling, and

h

that the area of land acquired does not exceed the permitted area.

I13612

Paragraph 11(g)(ii) does not apply to the grant of a lease or licence to the individual for a period of no more than 6 months.

PART 5Withdrawal of relief

Introductory

I13713

1

Relief under this schedule is withdrawn in the following circumstances.

2

Where relief is withdrawn, the amount of tax chargeable is the amount that would have been chargeable in respect of the acquisition but for the relief.

Relief under Part 3

I13814

Relief under Part 3 of this schedule (acquisition by property trader from individual acquiring new dwelling) is withdrawn if the property trader—

a

spends more than the permitted amount on refurbishment of the old dwelling,

b

grants a lease or licence of the old dwelling, or

c

permits any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling.

I13915

Paragraph 14(b) does not apply to the grant of a lease or licence to the individual for a period of no more than 6 months.

Relief under Part 4

I14016

Relief under Part 4 of this schedule (acquisition by property trader from individual where chain of transactions breaks down) is withdrawn if the property trader—

a

spends more than the permitted amount on refurbishment of the old dwelling,

b

grants a lease or licence of the old dwelling, or

c

permits any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling.

I14117

Paragraph 16(b) does not apply to the grant of a lease or licence to the individual for a period of no more than 6 months.

F59Additional amount: transactions relating to second homes etc.

Schedule 2A makes provision about an additional amount of tax chargeable in respect of certain chargeable transactions.

Meaning of “refurbishment” and “the permitted amount”

I15127

“Refurbishment” of a dwelling means the carrying out of works that enhance or are intended to enhance the value of the dwelling, but does not include—

a

cleaning the dwelling, or

b

works required solely for the purpose of ensuring that the dwelling meets minimum safety standards.

I15228

The “permitted amount”, in relation to the refurbishment of a dwelling, is set out in the following table—

Consideration for acquisition of the dwelling	Permitted amount
Not more than £200,000	£10,000
More than £200,000 but not more than £400,000	5% of the consideration
More than £400,000	£20,000

SCHEDULE 5Multiple dwellings relief

(introduced by section 27)

PART 1Introductory

Overview of relief

I1531

1

This schedule provides for relief in the case of certain land transactions involving multiple dwellings.

2

It is arranged as follows—

Part 2 identifies the transactions to which this schedule applies,
Part 3 defines key terms,
Part 4 describes the relief available if a claim is made,
Part 5 provides for withdrawal of the relief,
Part 6 contains rules to determine what counts as a dwelling.

PART 2Transactions to which this schedule applies

The rule

I1542

ii

an interest in a single dwelling and other property,

b

it is one of a number of linked transactions, and

c

the main subject-matter of at least one of the other linked transactions consists of—

i

an interest in some other dwelling or dwellings, or

ii

an interest in some other dwelling or dwellings and other property.

Excluded transactions

I1586

A transaction is excluded by this paragraph if—

a

relief under schedule 9 (crofting community right to buy) is available for it, or

b

relief under schedule 10 (group relief), 11 (reconstruction relief and acquisition relief) or 13 (charities relief)—

i

is available for it, or

ii

has been withdrawn from it.

PART 3Key terms

Consideration attributable to dwellings and remaining property

I1597

In relation to a relevant transaction—

a

the consideration attributable to dwellings is so much of the chargeable consideration for the transaction as is attributable to the dwellings,

b

the consideration attributable to remaining property is the chargeable consideration for the transaction less the consideration attributable to dwellings.

Dwellings

I1608

“The dwellings” are, in relation to a relevant transaction, the dwelling or dwellings that are, or are part of, the main subject-matter of the transaction.

Interest in a dwelling

I1619

A reference in this schedule to an interest in a dwelling is to any chargeable interest in or over a dwelling.

PART 4The relief

Calculation of relief

I16210

The amount of tax chargeable in relation to a relevant transaction F55other than one to which schedule 2A applies is—

(DT \times ND) + RT

where—

DT is the tax due in relation to a dwelling,

ND is the number of dwellings that are, or are part of, the main subject-matter of the transaction, and

RT is the tax due in relation to remaining property.

F6010A

The amount of tax chargeable in relation to a relevant transaction to which schedule 2A applies is—

where—

DT is the tax due in relation to each dwelling that is, or is part of, the main subject-matter of the transaction, and

RT is the tax due in relation to the remaining property.

I440F43 11

But where DT x ND F56or, as the case may be, ΣDT is less than the minimum prescribed amount, the amount of tax chargeable in relation to the relevant transaction is—

where—

MPA is the minimum prescribed amount, and
RT is the tax due in relation to remaining property.

I441 12

The minimum prescribed amount is such proportion as may be prescribed by the Scottish Ministers by order of—

where—

TT is the amount of tax that would be due in respect of the transaction but for this schedule, and
RT is the tax due in relation to remaining property.

Tax due in relation to a dwelling

I16313

The tax due in relation to a dwelling is determined as follows.

Step 1 Find the total consideration attributable to dwellings, that is—
1. a
  the consideration attributable to dwellings for the transaction, or
2. b
  where the transaction is one of a number of linked transactions, the sum of—
  1. i
    the consideration attributable to dwellings for the transaction, and
  2. ii
    the consideration attributable to dwellings for all other relevant transactions.
Step 2 Divide the total consideration attributable to dwellings by total dwellings.“Total dwellings” is the total number of dwellings by reference to which the total consideration attributable to dwellings is calculated.
Step 3 Calculate the amount of tax that would be due in relation to the relevant transaction were—
1. a
  the chargeable consideration equal to the result obtained in Step 2,
2. b
  the transaction a residential property transaction, and
3. c
  the transaction not a linked transaction.
The result is the tax due in relation to a dwelling.
F57Step 4 In the case of a relevant transaction to which schedule 2A applies, carry out Step 3 (taking account of any relief applicable to the transaction under paragraph 9 of that schedule) in relation to each dwelling that is, or is part of, the main subject-matter of the transaction to find the tax due in relation to each dwelling.

Tax due in relation to remaining property

I16414

The tax due in relation to remaining property is determined as follows.

Step 1 Calculate the amount of tax that would be due in respect of the transaction but for this schedule.
Step 2 Divide the consideration attributable to remaining property by the chargeable consideration for the transaction.
Step 3 Multiply the amount calculated in Step 1 by the fraction reached in Step 2. The result is the tax due in relation to remaining property.

General

I16515

“Attributable” means attributable on a just and reasonable basis.

PART 5Withdrawal of relief

Full withdrawal of relief

I16616

Relief under this schedule is withdrawn in relation to a relevant transaction if—

a

an event occurs in the relevant period, and

b

had the event occurred immediately before the effective date of the transaction, the transaction would not have been a relevant transaction.

I16717

Where relief is withdrawn, the amount of tax chargeable is the amount that would have been chargeable in respect of the transaction but for the relief.

Partial withdrawal of relief

I8118

Relief under this schedule is partially withdrawn in relation to a relevant transaction if—

a

an event occurs in the relevant period, and

b

had the event occurred immediately before the F11effective date of the transaction—

i

the transaction would have been a relevant transaction, but

ii

more tax would have been payable in respect of the transaction.

I16819

Where relief is partially withdrawn, tax is chargeable on the transaction as if the event had occurred immediately before the effective date of the transaction.

I16920

In that case, the tax so chargeable must be calculated by reference to the tax rates and tax bands in force at the effective date of the transaction.

Relevant period

I17021

“The relevant period” means the shorter of—

a

the period of 3 years beginning with the effective date of the transaction, and

b

the period beginning with the effective date of the transaction and ending with the date on which the buyer disposes of the dwelling, or the dwellings, to a person who is not connected with the buyer.

I17122

In relation to a transaction effected on completion of a contract that was substantially performed before completion, paragraph 21 applies as if references to the effective date of the transaction were to the date on which the contract was substantially performed.

Interpretation

I17223

In this Part of this schedule, “event” includes any change of circumstance or change of plan.

PART 6What counts as a dwelling

I17324

This Part of this schedule sets out rules for determining what counts as a dwelling for the purposes of this schedule.

I17425

A building or part of a building counts as a dwelling if—

a

it is used or suitable for use as a single dwelling, or

b

it is in the process of being constructed or adapted for such use.

I17526

Land that is, or is to be, occupied or enjoyed with a dwelling as a garden or grounds (including any building or structure on such land) is taken to be part of that dwelling.

I17627

Land that subsists, or is to subsist, for the benefit of a dwelling is taken to be part of that dwelling.

I17728

The main subject-matter of a transaction is also taken to consist of or include an interest in a dwelling if—

a

substantial performance of a contract constitutes the effective date of that transaction by virtue of a relevant deeming provision,

b

the main subject-matter of the transaction consists of or includes an interest in a building, or a part of a building, that is to be constructed or adapted under the contract for use as a single dwelling, and

c

construction or adaptation of the building, or the part of a building, has not begun by the time the contract is substantially performed.

I17829

In paragraph 28, “relevant deeming provision” means section 10 or 11.

I17930

Subsections (3) to (6) of section 59 apply for the purposes of this Part of this schedule as they apply for the purposes of subsection (1)(a) of that section.

SCHEDULE 6Relief for certain acquisitions by registered social landlords

(introduced by section 27)

The relief

I1801

A land transaction under which the buyer is a registered social landlord is exempt from charge if F44one or more of the qualifying conditions are met.

The qualifying conditions

I1812

The qualifying conditions are—

a

that the registered social landlord is controlled by its tenants,

b

that the seller is one of the following—

i

a registered social landlord,

ii

the Scottish Ministers,

iii

a local authority, F45or

c

that the transaction is funded with the assistance of a grant or other financial assistance—

i

made or given by way of a distribution pursuant to section 25 of the National Lottery etc. Act 1993 (c.39) (application of money by distributing bodies), or

ii

under section 2 of the Housing (Scotland) Act 1988 (c.43) (general functions of the Scottish Ministers).

Landlord controlled by tenants

I1823

The reference in paragraph 2(a) to a registered social landlord controlled by its tenants is to a registered social landlord the majority of whose board members are tenants occupying properties owned or managed by it.

I1834

For the purposes of paragraph 3, “board member” is to be construed as follows—

Type of registered social landlord	Board member
Company	A director of the company
Body corporate whose affairs are managed by its members	A member
Body of trustees	A trustee
None of the above	A member of the committee of management or other body to which is entrusted the direction of the affairs of the registered social landlord

SCHEDULE 7Alternative property finance relief

(introduced by section 27)

PART 1Introductory

Overview

I1841

1

This schedule makes provision for relief in the case of certain land transactions connected to alternative property finance arrangements.

2

It is arranged as follows—

Part 2 identifies the alternative property finance arrangements that are relieved,
Part 3 makes provision limiting the arrangements that can be relieved,
Part 4 provides for the circumstances in which the chargeable interest acquired by a financial institution under the arrangements is an exempt interest, and
Part 5 defines expressions used in this schedule.

b

as a distinct land transaction by virtue of section 12 (options and rights of pre-emption).

as a distinct land transaction by virtue of section 12 (options and rights of pre-emption).

I19512

A further transaction that is exempt from charge by virtue of paragraph 10 is not a notifiable transaction unless the transaction involves the transfer to the person of the whole interest purchased by the institution under the first transaction, so far as not transferred by a previous further transaction.

Land sold to financial institution and re-sold to person

b

has been withdrawn from that transaction.

No relief where arrangements to transfer control of financial institution

I20017

Paragraphs 2 to 12 do not apply to alternative finance arrangements if those arrangements, or any connected arrangements, include arrangements for a person to acquire control of the relevant financial institution.

I20118

That includes arrangements for a person to acquire control of the relevant financial institution only if one or more conditions are met (such as the happening of an event or doing of an act).

I20219

In paragraphs 17 and 18—

“alternative finance arrangements” means the arrangements referred to in paragraphs 2 and 7,
“connected arrangements” means any arrangements entered into in connection with the making of the alternative finance arrangements (including arrangements involving one or more persons who are parties to the alternative finance arrangements),
“relevant financial institution” means the financial institution which enters into the alternative finance arrangements.

I7320

Section 1124 of the Corporation Tax Act 2010 (c.4) applies for determining who has control of the relevant financial institution.

PART 4Exempt interest

Interest held by financial institution an exempt interest

I20321

An interest held by a financial institution as a result of the first transaction within the meaning of paragraph 2(a) or 7(a) is an exempt interest for the purposes of the tax.

I20422

That interest ceases to be an exempt interest if—

a

the lease or agreement mentioned in paragraph 2(b) or 7(b) ceases to have effect, or

b

the right under paragraph 2(c) or 7(c) ceases to have effect or becomes subject to a restriction.

I20523

Paragraph 21 does not apply if the first transaction is exempt from charge by virtue of schedule 10 (group relief) or 11 (reconstruction and acquisition reliefs).

I20624

Paragraph 21 does not make an interest exempt in respect of—

a

the first transaction itself, or

b

a third transaction or a further transaction within the meaning of paragraph 5 or 10.

PART 5Interpretation

Interpretation

I20725

1

In this schedule “financial institution” has the meaning given by section 564B of the Income Tax Act 2007 (c.3).

2

For this purpose section 564B(1) applies as if paragraph (d) were omitted.

I20826

In this schedule—

“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable),
references to a person are to be read, in relation to times after the death of the person concerned, as references to the person's personal representatives.

SCHEDULE 8Relief for alternative finance investment bonds

(introduced by section 27)

PART 1Overview and interpretation

Overview of relief

I2091

1

This schedule makes provision for relief in the case of certain land transactions connected to alternative finance investment bonds.

2

It is arranged as follows—

Part 2 provides that certain events relating to a bond are not to be treated as chargeable transactions (except in certain cases),
Part 3 sets out general conditions for the operation of the reliefs in Part 4,
Part 4 provides for relief in the case of certain transactions (and withdrawal of that relief),
Part 5 makes provision about supplementary matters including when the reliefs in Part 4 are not available.

Meaning of “alternative finance investment bond”

I2102

In this schedule, “alternative finance investment bond” means arrangements to which section 564G of the Income Tax Act 2007 (c.3) (investment bond arrangements) applies.

Interpretation

I2113

In this schedule—

“bond assets”, “bond-holder”, “bond-issuer” and “capital” have the meaning given by section 564G of the Income Tax Act 2007 (c.3),
“prescribed” means prescribed in regulations made by the Scottish Ministers,
“qualifying interest” means a major interest in land other than a lease for a period of 21 years or less.

PART 2Issue, transfer and redemption of rights under bond not to be treated as chargeable transaction

The relief

b

BH, or the group, acquires sufficient rights to enable BH, or the members of the group acting jointly, to exercise the right of management and control of the bond assets to the exclusion of any other bond-holders.

I796

1

But paragraph 5(1) does not apply (and accordingly, section 564S of the Income Tax Act 2007 applies by virtue of paragraph 4) in either of the following cases.

2

The first case is where—

a

at the time that the rights were acquired BH (or all the connected bond-holders) did not know and had no reason to suspect that the acquisition enabled the exercise of the right of management and control of the bond assets to the exclusion of other bond-holders, and

b

as soon as reasonably practicable after BH (or any of the bond-holders) becomes aware that the acquisition enables that exercise, BH transfers (or some or all of the bond-holders transfer) sufficient rights for that exercise no longer to be possible.

3

The second case is where BH—

a

underwrites a public offer of rights under the bond, and

b

does not exercise the right of management and control of the bond assets.

4

In this paragraph, “underwrite”, in relation to an offer of rights under a bond, means to agree to make payments of capital under the bond in the event that other persons do not make those payments.

PART 3General conditions for operation of reliefs etc.

Introduction

I2147

This Part of this schedule defines conditions A to G for the purposes of paragraphs 15 to 21.

Condition A

I2158

Condition A is that one person (P) and another (Q) enter into arrangements under which—

a

P transfers to Q a qualifying interest in land (“the first transaction”), and

b

P and Q agree that when the interest ceases to be held by Q as mentioned in paragraph 9(b), Q will transfer the interest to P.

Condition B

I2169

Condition B is that—

a

Q, as bond-issuer, enters into an alternative finance investment bond (whether before or after entering into the arrangements mentioned in paragraph 8), and

b

the interest in land to which those arrangements relate is held by Q as a bond asset.

Condition C

I21710

Condition E is that the total of the payments of capital made to Q before the termination of the bond is not less than 60% of the value of the interest in the land at the time of the first transaction.

Condition F

I22013

Condition F is that Q holds the interest in land as a bond asset until the termination of the bond.

Condition G

I22114

1

Condition G is that—

a

before the end of the period of 30 days beginning with the date on which the interest in the land ceases to be held as a bond asset, that interest is transferred by Q to P (“the second transaction”), and

b

the second transaction is effected not more than 10 years after the first transaction.

2

The Scottish Ministers may by regulations amend sub-paragraph (1)(b) by substituting for the period mentioned there such other period as may be specified.

PART 4Relief for certain transactions

The relief: first transaction

I22215

Amount of tax chargeable where relief withdrawn

If, after the effective date of the second transaction, Q provides the Tax Authority with the prescribed evidence that each of conditions A to C and E to G has been met, the land ceases to be subject to the security registered in pursuance of condition D.

PART 5Supplementary

6

If the replacement land is not in Scotland, the original land ceases to be subject to the security registered in pursuance of condition D when Q provides the Tax Authority with the prescribed evidence that—

a

condition G is met in relation to the original land, and

b

each of conditions A to C is met in relation to the replacement land.

I22922

1

Paragraph 21 also applies where the replacement land is replaced by further replacement land.

2

In that event—

a

the references to the original land (except those in paragraph 21(4)) are to be read as references to the replacement land, and

b

the references to the replacement land are to be read as references to the further replacement land.

Tax Authority to register discharge of security

I23023

1

Where a security is discharged in accordance with paragraph 20 or 21(5) or (6), the Tax Authority must register the discharge in the Land Register of Scotland.

2

The Tax Authority must do so within the period of 30 days beginning with the date on which Q provides the evidence in question.

Relief not available where bond-holder acquires control of underlying asset

I23124

1

The reliefs provided by paragraphs 15 and 19 (and paragraph 21 so far as it relates to those paragraphs) are not available if control of the underlying asset is acquired by—

a

SCHEDULE 9Crofting community right to buy relief

(introduced by section 27)

The relief

1I442F17 The relief

A land transaction—

a

entered into in pursuance of the crofting community right to buy, and

b

under which two or more crofts are being bought,

is exempt from charge.

Interpretation

I2344

In this schedule “crofting community right to buy” means the right exercisable by a crofting community body under Part 3 of the Land Reform (Scotland) Act 2003 (asp 2).

SCHEDULE 10Group relief

(introduced by section 27)

PART 1Introductory

Overview

I821

1

This schedule provides for relief for certain transactions involving companies.

2

It is arranged as follows—

Part 2 provides for when relief is available,
Part 3 provides for when the relief is withdrawn,
F46Part 3A provides for recovery of tax where relief is withdrawn,
Part 4 defines expressions used in this schedule.

PART 2The relief

The relief

I2352

A land transaction is exempt from charge if the seller and buyer are companies that at the effective date of the transaction are members of the same group.

Restrictions on availability of relief

I2363

Relief under this schedule is not available if at the effective date of the transaction there are arrangements in existence by virtue of which, at that or some later time, a person has or could obtain, or any persons together have or could obtain, control of the buyer but not of the seller.

I2374

Paragraph 3 does not apply to arrangements to which paragraph 9 or 10 applies.

I2385

Relief under this schedule is not available if the transaction is effected in pursuance of, or in connection with, arrangements under which—

a

the consideration, or any part of the consideration, for the transaction is to be provided or received (directly or indirectly) by a person other than a group company, or

b

the seller and the buyer are to cease to be members of the same group by reason of the buyer ceasing to be a 75% subsidiary of the seller or a third company.

I2396

Arrangements are within paragraph 5(a) if under them the seller or the buyer, or another group company, is to be enabled to provide any of the consideration, or is to part with any of it, by or in consequence of the carrying out of a transaction or transactions involving, or any of them involving, a payment or other disposition by a person other than a group company.

I2407

Paragraph 5(b) does not apply to arrangements to which paragraph 10 applies.

I2418

Relief under this schedule is not available if the transaction—

a

is not effected for bona fide commercial reasons, or

b

forms part of arrangements the main purpose, or one of the main purposes, of which is the avoidance of liability to the tax.

Arrangements that do not restrict availability of relief

I2429

This paragraph applies to arrangements entered into with a view to an acquisition of shares by a company (“the acquiring company”)—

a

in relation to which section 75 of the Finance Act 1986 (c.41) (stamp duty: acquisition relief) will apply,

b

in relation to which the conditions for relief under that section will be met, and

c

as a result of which the buyer will be a member of the same group as the acquiring company.

I24310

This paragraph applies to arrangements in so far as they are for the purpose of facilitating a transfer of the whole or part of the business of a company to another company in relation to which—

a

section 96 of the Finance Act 1997 (c.16) (stamp duty relief: demutualisation of insurance companies) is intended to apply, and

b

the conditions for relief under that section are intended to be met.

Interpretation

I24411

In this Part of this schedule—

“control” has the meaning given by section 1124 of the Corporation Tax Act 2010 (c.4),
“group company” means a company that at the effective date of the transaction is a member of the same group as the seller and the buyer.

PART 3Withdrawal of relief

Overview

I24512

This Part of this schedule is arranged as follows—

paragraphs 13 to 19 provide for circumstances where relief under this schedule is withdrawn,
paragraphs 20 to 31 provide for circumstances in which, despite paragraphs 13 to 19, relief is not withdrawn, and
paragraphs 32 to 40 provide for the application of paragraphs 13 to 31 where there are successive transactions.

Withdrawal of relief

I24613

Relief under this schedule is withdrawn or partially withdrawn where paragraphs 14 and 15 apply.

I24714

the market value of the subject-matter of the transaction, or

b

if the acquisition was the grant of a lease, the rent.

Amount of tax chargeable where relief partially withdrawn

I25118

Where relief is partially withdrawn, the amount of tax chargeable is an appropriate proportion of the amount determined in accordance with paragraph 17.

I25219

An “appropriate proportion” means an appropriate proportion having regard to—

a

the subject-matter of the relevant transaction, and

b

what is held at the relevant time by the buyer or, as the case may be, by the buyer and its relevant associated companies.

Case where relief not withdrawn: winding up

I25320

Relief under this schedule is not withdrawn where the buyer ceases to be a member of the same group as the seller by reason of anything done for the purposes of, or in the course of, winding up the seller or another company that is above the seller in the group structure.

the buyer ceases to be a member of the same group as the acquiring company in the circumstances mentioned in paragraph 24, and

b

at the time the buyer ceases to be a member of the same group as the acquiring company, it or a relevant associated company holds a chargeable interest to which paragraph 25 applies,

this schedule applies as if the buyer had then ceased to be a member of the same group as the seller.

I25724

the buyer is wound up.

I26431

For the purposes of paragraph 30 a person does not control, or obtain control of, the buyer if that person is under the control of another person or other persons.

Withdrawal of relief in certain cases involving successive transactions

I26532

Where the following conditions are met, paragraphs 13 to 31 have effect in relation to the relevant transaction as if the seller in relation to the earliest previous transaction falling within paragraph 37 were the seller in relation to the relevant transaction.

I26633

The first condition is that there is a change in control of the buyer.

I26734

The second condition is that the change occurs—

a

before the end of the period of 3 years beginning with the effective date of the transaction which is exempt from charge by virtue of this schedule (“the relevant transaction”), or

b

in pursuance of, or in connection with, arrangements made before the end of that period.

I26835

The third condition is that, apart from paragraph 32, relief under this schedule in relation to the relevant transaction would not be withdrawn under paragraph 13.

I26936

The fourth condition is that any previous transaction falls within paragraph 37.

I27037

A previous transaction falls within this paragraph if—

a

the previous transaction is exempt from charge by virtue of this schedule or schedule 11 (reconstruction relief and acquisition relief),

b

the effective date of the previous transaction is less than 3 years before the date of the change mentioned in the first condition,

c

the chargeable interest acquired under the relevant transaction by the buyer in relation to that transaction is the same as, comprises, forms part of, or is derived from, the chargeable interest acquired under the previous transaction by the buyer in relation to the previous transaction, and

d

since the previous transaction, the chargeable interest acquired under that transaction has not been acquired by any person under a transaction that is not exempt from charge by virtue of this schedule or schedule 11 (reconstruction relief and acquisition relief).

I27138

Paragraph 33 does not apply where—

a

b

the other persons who controlled the buyer before the change continue to do so.

I27239

If two or more transactions effected at the same time are the earliest previous transactions falling within paragraph 37, the reference in paragraph 32 to the seller in relation to the earliest previous transaction is a reference to the persons who are the sellers in relation to the earliest previous transactions.

I27340

There is a change in the control of a company if—

a

a person who controls the company (alone or with others) ceases to do so,

b

a person obtains control of the company (alone or with others), or

c

the company is wound up.

Interpretation

I27441

For the purposes of paragraphs 20 and 27 a company is “above” the seller in the group structure if the seller, or another company that is above the seller in the group structure, is a 75% subsidiary of the company.

I27542

In this Part of this schedule—

“control” is to be interpreted in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c.4) (but see paragraph 31),
“relevant associated company”, in relation to the buyer, means a company that—
1. a
  is a member of the same group as the buyer immediately before the buyer ceases to be a member of the same group as the seller, and
2. b
  ceases to be a member of the same group as the seller in consequence of the buyer so ceasing.

F18PART 3ARecovery of relief

Annotations:

a company (“company A”) is “above” another company (“company B”) in a group structure if company B, or another company that is above company B in the group structure, is a 75% subsidiary of company A.

42D

In paragraph 42B(c)—

“ director ”, in relation to a company, has the meaning given by section 67(1) of the Income Tax (Earnings and Pensions) Act 2003 (c.1) (read with subsection (2) of that section) and includes a person falling within section 452(1) of the Corporation Tax Act 2010 (c.4),
“ controlling director ”, in relation to a company, means a director of the company who has control of it (construing control in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c.4)).

42ERecovery of relief: supplementary

The Tax Authority may give notice to a person within paragraph 42B requiring that person within 30 days of receipt of the notice to pay the amount that remains unpaid.

42F

Any such notice must be given before the end of the period of 3 years beginning with the date of the final determination mentioned in paragraph 42A(b).

42G

The notice must state the amount required to be paid by the person to whom the notice is given.

42H

The notice has effect—

a

for the purposes of the recovery from that person of the amount required to be paid and of interest on that amount, and

b

for the purpose of appeals,

as if it were a notice of a Revenue Scotland assessment and that amount were an amount of tax due from that person.

42I

A person who has paid an amount in pursuance of a notice under paragraph 42E may recover that amount from the buyer.

42J

A payment in pursuance of a notice under paragraph 42E is not allowed as a deduction in computing any income, profits or losses for any tax purpose.

42K

In paragraph 42H, “ Revenue Scotland assessment ” has the same meaning as in section 100 of the Revenue Scotland and Tax Powers Act 2014 (asp 16).

PART 4Interpretation

When are companies members of the same group?

I27643

Companies are members of the same group if one is the 75% subsidiary of the other or both are 75% subsidiaries of a third company.

When is a company a subsidiary of another company?

I27744

A company (A) is the 75% subsidiary of another company (B) if B—

a

is beneficial owner of not less than 75% of the ordinary share capital of A,

b

is beneficially entitled to not less than 75% of any profits available for distribution to equity holders of A, and

c

would be beneficially entitled to not less than 75% of any assets of A available for distribution to its equity holders on a winding-up.

I27845

For the purposes of paragraph 44(a)—

a

the ownership referred to is ownership either directly or through another company or companies,

b

the amount of ordinary share capital of A owned by B through another company or companies is to be determined in accordance with sections 1155 to 1157 of the Corporation Tax Act 2010 (c.4).

I27946

“Ordinary share capital”, in relation to a company, means all the issued share capital (by whatever name called) of the company, other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company.

I7547

Chapter 6 of Part 5 of the Corporation Tax Act 2010 (c.4) (group relief: equity holders and profits or assets available for distribution) applies for the purposes of paragraph 44(b) and (c) as it applies for the purposes of section 151(4)(a) and (b) of that Act.

I7448

But sections 171(1)(b) and (3), 173, 174 and 176 to 178 of that Chapter are to be treated as omitted for the purposes of paragraph 44(b) and (c).

Other definitions

I28049

In this schedule—

“arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable,
“company” means a body corporate.

F19SCHEDULE 10ASub-sale development relief

( introduced by section 27 )

Annotations:

Amendments (Textual)

F19

Sch. 10A inserted (1.4.2015) by The Land and Buildings Transaction Tax (Sub-sale Development Relief and Multiple Dwellings Relief) (Scotland) Order 2015 (S.S.I. 2015/123) , arts. 1(1) , 7 , Sch.

PART 1Introductory

Overview of relief

1

This schedule provides for relief in the case of land transactions involving certain sub-sales.

2

It is arranged as follows—

Part 2 provides for the relief and defines key terms and expressions,
Part 3 provides for withdrawal of the relief,
Part 4 makes provision for supplementary matters.

PART 2The relief

General

2

1

Relief under this schedule may be claimed by the buyer (the “first buyer”) in a contract (the “first contract”) for the acquisition by that buyer of a chargeable interest under which the acquisition is to be completed by a conveyance if—

a

there is a qualifying sub-sale, and

b

the qualifying conditions are met.

2

The reference in sub-paragraph (1) to a contract does not include a contract that is a sub-sale or an assignation of rights in relation to another contract.

Qualifying sub-sale

3

A sub-sale is a qualifying sub-sale if—

a

it is a sub-sale under which—

i

the first buyer contracts to sell the whole or part of the subject-matter of the first contract to another person (the “second buyer”), and

ii

the second buyer becomes entitled to call for a conveyance to that person of the whole or part of the subject-matter of the first contract, and

b

immediately before the first buyer entered into the sub-sale, the first buyer was entitled under the first contract to call for a conveyance of the whole or part of that subject-matter.

Qualifying conditions

4

1

The qualifying conditions are that—

a

the substantial performance or completion of the first contract takes place at the same time as, and in connection with, the substantial performance or completion of the qualifying sub-sale, and

b

significant development for commercial purposes of the subject-matter of the qualifying sub-sale will be completed within the relevant period.

2

For the purposes of sub-paragraph (1)(a), an assignation, sub-sale or other transaction (relating to the whole or part of the subject-matter of the qualifying sub-sale), as a result of which a person other than the second buyer becomes entitled to call for a conveyance to that person, is not to be treated as substantial performance of the qualifying sub-sale.

3

The “relevant period” is the period of 5 years from the date on which the first buyer entered into the qualifying sub-sale.

Subject-matter

5

References in this schedule to the “subject-matter” of a qualifying sub-sale are to the chargeable interest the conveyance of which the second buyer is entitled to call for as a result of the qualifying sub-sale.

6

References in this schedule to “part of the subject-matter” of the first contract are to a chargeable interest that is the same as the chargeable interest referred to in paragraph 2(1) except that it relates to part only of the land concerned.

Significant development

7

In this schedule—

“development”—
1. a
  means the building, on the subject-matter of the qualifying sub-sale, of buildings including educational, sports and leisure, residential, retail, office or industrial buildings (but not agricultural buildings, mining or engineering works (other than wind farms) or plant and machinery), and
2. b
  includes the redevelopment of such buildings, where the redevelopment works carried out are comparable in scale or cost to the construction of such buildings,
“significant development” means development that is significant having regard to, among other things, the nature and extent of the subject-matter of the qualifying sub-sale and to the market value of that subject-matter.

8

In paragraph 7—

“agricultural” is to be construed as meaning used for the purposes of the trade of agriculture, which includes horticulture, fruit growing, seed growing, dairy farming, livestock breeding and keeping, the use of land as grazing land, meadow land, osier land, market gardens and nursery grounds and the use of land for woodlands where that use is ancillary to the farming of land for other agricultural purposes,
“building” has the meaning given in section 55 of the Building (Scotland) Act 2003,
“industrial building” includes a building built to be used for the purposes of a trade carried on in a factory, mill or laboratory, for the purposes of a dock undertaking, for the purposes of the trade of hotel-keeping, or for the purposes of a trade which consists of the operation or management of an airport used solely or mainly by aircraft carrying passengers or cargo for hire or reward.

Full relief

9

1

Where the subject-matter of the qualifying sub-sale is the whole subject-matter of the first contract, the land transaction—

a

effected as mentioned in section 9(1) on completion of the first contract, or

b

treated as effected under section 10(1) on that contract being substantially performed,

is exempt from charge.

2

The land transaction effected or treated as effected as mentioned in sub-paragraph (1) is “the first land transaction”.

Partial relief

10

1

Where the subject-matter of the qualifying sub-sale is part of the subject-matter of the first contract, the chargeable consideration for the first land transaction is taken to be the amount calculated by deducting from the amount that would otherwise be the chargeable consideration for that transaction were there no relief under this schedule, the amount of that consideration attributable to the part of the subject-matter of that transaction which is also the subject-matter of the qualifying sub-sale.

2

“Attributable” means attributable on a just and reasonable basis.

Claiming the relief

11

Where the first buyer claims relief under this schedule, the return made in respect of the first land transaction must include such evidence as Revenue Scotland may specify as to the significant development for commercial purposes of the subject-matter of the qualifying sub-sale that will be completed within the relevant period.

12

Relief under this schedule may not be claimed if relief is claimed under schedule 7 (alternative property finance relief).

PART 3Withdrawal of relief

Full withdrawal of relief

13

Relief under this schedule is withdrawn if no development of the subject-matter of the qualifying sub-sale takes place within the relevant period.

14

Where relief is withdrawn, the amount of tax chargeable in relation to the first land transaction is the amount that would have been chargeable in respect of that transaction but for the relief.

Partial withdrawal of relief

15

1

Relief under this schedule is partially withdrawn if—

a

the significant development proposed when the relief was given has not been completed within the relevant period, but

b

some development of the subject-matter of the qualifying sub-sale has taken place within that period.

2

Where relief is partially withdrawn, the amount of tax chargeable in relation to the first land transaction is an appropriate proportion of the amount that would have been chargeable in respect of that transaction but for the relief.

3

An “appropriate proportion” means an appropriate proportion that is just and reasonable having regard to, among other things, the extent to which the significant development proposed when the relief was given has taken place.

PART 4Supplementary

Disapplication of section 14

16

Where relief under this schedule is given, section 14(1)(c) is to be disregarded in so far as it relates to the entry into the qualifying sub-sale by the first buyer.

Qualifying sub-sale: consideration

17

Where relief under this schedule is given the chargeable consideration for the qualifying sub-sale is—

a

so much of the consideration under the first land transaction as is referable to the subject-matter of the qualifying sub-sale and is to be given (directly or indirectly) by the second buyer or a person connected with the second buyer, and

b

the consideration given for the qualifying sub-sale.

SCHEDULE 11Reconstruction relief and acquisition relief

(introduced by section 27)

PART 1Introductory

Overview

I831

1

This schedule provides for relief for certain transactions in connection with the reconstruction and acquisition of companies.

2

It is arranged as follows—

Part 2 provides for when reconstruction relief is available,
Part 3 provides for when acquisition relief is available,
Part 4 provides for when the relief is withdrawn,
F47Part 4A provides for recovery of tax where relief is withdrawn,
Part 5 defines expressions used in this schedule.

PART 2Reconstruction relief

The relief

I2812

A land transaction is exempt from charge if—

a

it is entered into for the purposes of or in connection with the transfer of an undertaking or part of an undertaking, and

b

the qualifying conditions are met.

Qualifying conditions

I2823

The qualifying conditions are—

a

that a company (“the acquiring company”) acquires the whole or part of the undertaking of another company (“the target company”) in pursuance of a scheme for the reconstruction of the target company,

b

that the consideration for the acquisition consists wholly or partly of the issue of non-redeemable shares in the acquiring company to all shareholders of the target company,

c

that after the acquisition has been made—

i

each shareholder of each of the companies is a shareholder of the other, and

that the undertaking or part acquired by the acquiring company has as its main activity the carrying on of a trade that does not consist wholly or mainly of dealing in chargeable interests,

e

that the acquisition—

i

is effected for bona fide commercial reasons, and

ii

does not form part of arrangements the main purpose, or one of the main purposes, of which is the avoidance of liability to the tax.

I2858

Where the consideration for the acquisition consists partly of the issue of non-redeemable shares as mentioned in qualifying condition (b), that condition is met only if the rest of the consideration consists wholly of—

a

cash not exceeding 10% of the nominal value of the non-redeemable shares so issued,

b

the assumption or discharge by the acquiring company of liabilities of the target company, or

c

both of those things.

Interpretation

I859

For the purposes of qualifying condition (c)—

a

companies are associated if one has control of the other or both are controlled by the same person or F16persons,

b

“control” is to be construed in accordance with section 1124 of the Corporation Tax Act 2010 (c.4).

I28610

In this Part of this schedule, “trade” includes any venture in the nature of trade.

PART 4Withdrawal of relief

Overview

I28711

This Part of this schedule is arranged as follows—

paragraphs 12 to 14 provide for circumstances in which relief under Part 2 or Part 3 of this schedule is withdrawn or partially withdrawn,
paragraphs 15 to 21 provide for circumstances in which, despite paragraphs 12 to 14, relief is not withdrawn,
paragraphs 22 to 28 provide for the withdrawal of relief, which would otherwise not be withdrawn by virtue of paragraph 17 or 19, on the occurrence of certain subsequent events,
paragraphs 29 to 32 provide for how the tax chargeable is determined where relief is withdrawn or partially withdrawn.

Withdrawal of relief

I28812

Relief under Part 2 or Part 3 of this schedule is withdrawn or partially withdrawn where paragraphs 13 and 14 apply.

I28913

meets the conditions in paragraph 7(2) of that schedule (variation of testamentary dispositions etc.).

Case where relief not withdrawn: exempt intra-group transfer

I29317

Relief under Part 2 or Part 3 of this schedule is not withdrawn where control of the acquiring company changes as a result of an exempt intra-group transfer.

I29418

But see paragraphs 22 to 24 for the effect of a subsequent non-exempt transfer.

Case where relief not withdrawn: controlling loan creditor

I29721

Relief under Part 2 or Part 3 of this schedule is not withdrawn where—

a

control of the acquiring company changes as a result of a loan creditor (within the meaning of section 453 of the Corporation Tax Act 2010 (c.4)) becoming, or ceasing to be, treated as having control of the company, and

b

the other persons who were previously treated as controlling the company continue to be so treated.

Withdrawal of relief on subsequent non-exempt transfer

I29822

Relief under Part 2 or Part 3 of this schedule is withdrawn or partially withdrawn if—

a

control of the acquiring company changes as a result of an exempt intra-group transfer, and

b

paragraphs 23 and 24 apply.

I29923

This paragraph applies where a company holding shares in the acquiring company to which the exempt intra-group transfer related, or that are derived from shares to which that transfer related, ceases to be a member of the same group as the target company—

a

b

in pursuance of, or in connection with, arrangements made before the end of that period.

I30024

This paragraph applies where the acquiring company or a relevant associated company, at that time (“the relevant time”), holds a chargeable interest—

a

that was transferred to the acquiring company by the relevant transaction, or

b

that is derived from an interest so transferred,

and that has not subsequently been transferred at market value under a chargeable transaction in relation to which relief under Part 2 or Part 3 of this schedule was available but was not claimed.

Amount of tax chargeable where relief withdrawn

I30529

Where relief is withdrawn, the amount of tax chargeable is determined in accordance with paragraph 30.

I30630

a

the market value of the subject-matter of the transaction,

b

if the acquisition was the grant of a lease, the rent.

Amount of tax chargeable where relief partially withdrawn

I30731

Where relief is partially withdrawn, the tax chargeable is an appropriate proportion of the amount determined in accordance with paragraph 30.

I30832

An “appropriate proportion” means an appropriate proportion having regard to—

a

the subject-matter of the relevant transaction, and

b

what is held at the relevant time by the acquiring company or, as the case may be, by that company and any relevant associated companies.

Interpretation

I30933

In paragraphs 19 and 25—

a

“share acquisition relief” means relief under section 77 of the Finance Act 1986 (c.41), and

b

a transfer is one in relation to which that relief applies if an instrument effecting the transfer is exempt from stamp duty by virtue of that provision.

I31034

In this Part of this schedule, references to control of a company changing are to the company becoming controlled—

a

by a different person,

b

by a different number of persons, or

c

by two or more persons at least one of whom is not the person, or one of the persons, by whom the company was previously controlled.

I31135

In this Part of this schedule—

“control” is to be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c.4),
“exempt intra-group transfer” means a transfer of shares effected by an instrument that is exempt from stamp duty by virtue of section 42 of the Finance Act 1930 (c.28) or section 11 of the Finance Act (Northern Ireland) 1954 (c.23 (NI)) (transfers between associated bodies corporate),
“relevant associated company”, in relation to the acquiring company, means a company—
1. a
  that is controlled by the acquiring company immediately before the control of that company changes, and
2. b
  of which control changes in consequence of the change of control of that company.

F21PART 4ARecovery of relief

Annotations:

Amendments (Textual)

F21

Sch. 11 Pt. 4A inserted (1.4.2015) by Revenue Scotland and Tax Powers Act 2014 (asp 16) , s. 260(2) , Sch. 4 para. 9(21)(d) (with ss. 257-259 ); S.S.I. 2015/110 , art. 2(1)

35ARecovery of relief

This Part applies where—

a

relief under Part 2 or Part 3 of this schedule is withdrawn or partially withdrawn,

b

the amount of tax chargeable has been finally determined, and

c

the whole or part of the amount so chargeable is unpaid 6 months after the date on which it became payable.

35B

The following persons may, by notice under paragraph 35E, be required to pay the unpaid tax—

a

any company that at any relevant time was a member of the same group as the acquiring company and was above it in the group structure,

b

any person who at any relevant time was a controlling director of the acquiring company or a company having control of the acquiring company.

35C

For the purposes of paragraph 35B—

a

“ relevant time ” means any time between the effective date of the relevant transaction and the change of control by virtue of which tax is chargeable, and

b

35D

In paragraph 35B(b)—

“ director ”, in relation to a company, has the meaning given by section 67(1) of the Income Tax (Earnings and Pensions) Act 2003 (c.1) (read with subsection (2) of that section) and includes a person falling within section 452(1) of the Corporation Tax Act 2010 (c.4),
“ controlling director ”, in relation to a company, means a director of the company who has control of it (construing control in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c.4)).

35ERecovery of relief: supplementary

The Tax Authority may give notice to a person within paragraph 35B requiring that person within 30 days of receipt of the notice to pay the amount that remains unpaid.

35F

Any such notice must be given before the end of the period of 3 years beginning with the date of the final determination mentioned in paragraph 35A(b).

35G

The notice must state the amount required to be paid by the person to whom the notice is given.

35H

The notice has effect—

a

for the purposes of the recovery from that person of the amount required to be paid and of interest on that amount, and

b

for the purpose of appeals,

as if it were a notice of a Revenue Scotland assessment and that amount were an amount of tax due from that person.

35I

A person who has paid an amount in pursuance of a notice under paragraph 35E may recover that amount from the acquiring company.

35J

A payment in pursuance of a notice under paragraph 35E is not allowed as a deduction in computing any income, profits or losses for any tax purpose.

35K

In paragraph 35H, “ Revenue Scotland assessment ” has the same meaning as in section 100 of the Revenue Scotland and Tax Powers Act 2014 (asp 16).

PART 5Interpretation

When are companies members of the same group?

I31236

Companies are members of the same group if one is the 75% subsidiary of the other or both are 75% subsidiaries of a third company.

When is a company a subsidiary of another company?

I31337

A company (A) is the 75% subsidiary of another company (B) if B—

a

is beneficial owner of not less than 75% of the ordinary share capital of A,

b

is beneficially entitled to not less than 75% of any profits available for distribution to equity holders of A, and

c

would be beneficially entitled to not less than 75% of any assets of A available for distribution to its equity holders on a winding-up.

I31438

For the purposes of paragraph 37—

a

the ownership referred to in that paragraph is ownership either directly or through another company or companies, and

b

the amount of ordinary share capital of A owned by B through another company or companies is to be determined in accordance with sections 1155 to 1157 of the Corporation Tax Act 2010 (c.4).

I31539

I7740

Chapter 6 of Part 5 of the Corporation Tax Act 2010 (c.4) (group relief: equity holders and profits or assets available for distribution) applies for the purposes of paragraph 37(b) and (c) as it applies for the purposes of section 151(4)(a) and (b) of that Act.

I7641

But sections 171(1)(b) and (3), 173, 174 and 176 to 178 of that Chapter are to be treated as omitted for the purposes of paragraph 37(b) and (c).

Other definitions

I31642

In this schedule—

“arrangements” include any scheme, agreement or understanding, whether or not legally enforceable,
“non-redeemable shares” means shares that are not redeemable shares.

SCHEDULE 12Relief for incorporation of limited liability partnership

(introduced by section 27)

The relief

I3171

A land transaction by which a chargeable interest is transferred by a person (“the transferor”) to a limited liability partnership in connection with its incorporation is exempt from charge if the qualifying conditions are met.

The qualifying conditions

I3182

The qualifying conditions are—

a

that the effective date of the transaction is not more than 1 year after the date of incorporation of the limited liability partnership,

b

that at the relevant time the transferor—

i

is a partner in a partnership, or

ii

holds the interest transferred as nominee or bare trustee for one or more partners in a partnership,

c

that at the relevant time the partnership mentioned in paragraph (b) is comprised of all the persons who are or are to be members of the limited liability partnership (and no-one else), and

d

that either—

i

the proportions of the interest transferred to which the persons mentioned in paragraph (c) are entitled immediately after the transfer are the same as those to which they were entitled at the relevant time, or

ii

none of the differences in those proportions has arisen as part of a scheme or arrangement of which the main purpose, or one of the main purposes, is avoidance of liability to the tax.

Interpretation

I3193

In this schedule—

“limited liability partnership” means a limited liability partnership formed under the Limited Liability Partnerships Act 2000 (c.12) or the Limited Liability Partnerships Act (Northern Ireland) 2002 (c.12 (N.I.)),
“the relevant time” means—
1. a
  where the transferor acquired the interest after the incorporation of the limited liability partnership, immediately after the transferor acquired it, and
2. b
  in any other case, immediately before the incorporation of the limited liability partnership.

SCHEDULE 13Charities relief

(introduced by section 27)

The relief

I3201

A land transaction is exempt from charge if the buyer is a charity and the qualifying conditions are met.

Qualifying conditions

I3212

The qualifying conditions are—

a

that the buyer intends to hold—

i

the subject-matter of the transaction, or

ii

the greater part of that subject-matter,

for qualifying charitable purposes, and

b

that the transaction has not been entered into for the purpose of avoiding the tax (whether by the buyer or any other person).

Qualifying charitable purposes

I3223

A buyer holds the subject-matter of a transaction for qualifying charitable purposes if the buyer holds it—

a

for use in the furtherance of the charitable purposes of the buyer or of another charity, or

b

as an investment from which the profits are applied to the charitable purposes of the buyer.

any transfer by the buyer of a major interest in the whole or any part of the subject-matter of the relevant transaction, or

b

c

paragraph 10 has effect as if—

i

in paragraph (a), for “at the time of” there were substituted “ immediately before and immediately after ”,

ii

paragraph (b) were omitted.

Charitable trusts

a

different amounts of rent are payable for different parts of the term, and

b

those amounts (or any of them) are ascertainable at the time of the disqualifying event,

the average annual rent over the period for which the highest ascertainable rent is payable.

F20SCHEDULE 13A ( introduced by section 27 )

Annotations:

Amendments (Textual)

F20

Schs. 13A, 13B inserted (1.4.2015) by The Land and Buildings Transaction Tax (Addition and Modification of Reliefs) (Scotland) Order 2015 (S.S.I. 2015/93), arts. 1(2), 2(5)

FRIENDLY SOCIETIES RELIEF

1The relief

A land transaction effected by or in consequence of any of the following is exempt from charge—

a

an amalgamation of two or more registered societies under section 82 of the Friendly Societies Act 1974 (amalgamation and transfer of engagements),

b

an amalgamation of two or more friendly societies under section 85 of the Friendly Societies Act 1992 (amalgamation of friendly societies),

c

a transfer of engagements between registered societies under section 82 of the Friendly Societies Act 1974,

d

a transfer of engagements between friendly societies under section 86 of the Friendly Societies Act 1992 (transfer of engagements by or to friendly society),

e

a transfer of the engagements of a friendly society pursuant to a direction given by the appropriate authority under section 90 of the Friendly Societies Act 1992.

2Interpretation

In this schedule—

“the appropriate authority” has the meaning given by section 119(1) of the Friendly Societies Act 1992,
“friendly society” has the meaning given by section 116 of that Act,
“registered” in relation to a society, has the meaning given by section 111 of the Friendly Societies Act 1974.

SCHEDULE 13B(introduced by section 27)

BUILDING SOCIETIES RELIEF

1The relief

A land transaction effected by or in consequence of any of the following is exempt from charge—

a

an amalgamation of two or more building societies under section 93 of the Building Societies Act 1986 (amalgamations),

b

a transfer of engagements between building societies under section 94 of that Act (transfer of engagements).

2Interpretation

In this schedule, “building society” has the meaning given by section 119(1) of the Building Societies Act 1986.

SCHEDULE 14Relief for certain compulsory purchases

(introduced by section 27)

The relief

I3361

An acquisition of a chargeable interest by a local authority is exempt from charge if the qualifying condition is met.

Qualifying condition

I3372

The qualifying condition is that the local authority has made a compulsory purchase order in respect of the chargeable interest for the purpose of facilitating the undertaking or achievement of an activity or purpose mentioned in section 189 of the Town and Country Planning (Scotland) Act 1997 (c.8) by another person.

Interpretation

I3383

For the purposes of this schedule it does not matter how the acquisition is effected (so this provision applies where the acquisition is effected by agreement).

SCHEDULE 15Relief for compliance with planning obligations

(introduced by section 27)

The relief

I3391

A land transaction that is entered into in order to comply with—

a

a planning obligation, or

b

a modification of a planning obligation,

is exempt from charge if the qualifying conditions are met.

The qualifying conditions

I3402

The qualifying conditions are—

a

that the planning obligation or modification is enforceable against the seller,

b

that the buyer is a public body, and

c

the effective date of the transaction is within the period of 5 years beginning with the date on which the planning obligation was entered into or modified.

“Planning obligation” and “modification”

I3413

“Planning obligation” means an agreement made under section 75 of the Town and Country Planning (Scotland) Act 1997 (c.8).

I3424

“Modification” of a planning obligation means modification as mentioned in sections 75A and 75B of that Act.

Public authorities

I3435

The following are public bodies for the purposes of paragraph 2(b)—

a local authority,
the common services agency established under section 10(1) of the National Health Service (Scotland) Act 1978 (c.29),
a health board established under section 2(1)(a) of that Act,
Healthcare Improvement Scotland established under section 10A of that Act,
a special health board established under section 2(1)(b) of that Act,
any other body that is the planning authority for any of the purposes of the planning Acts within the meaning of the Town and Country Planning (Scotland) Act 1997 (c.8),
a person prescribed for the purposes of this paragraph by the Scottish Ministers by order.

SCHEDULE 16Public bodies relief

(introduced by section 27)

The relief

I3441

A land transaction entered into on, in consequence of or in connection with a reorganisation effected by or under an enactment is exempt from charge if the buyer and seller are both public bodies.

I3452

The Scottish Ministers may, by order, provide that a land transaction that is not entered into as mentioned in paragraph 1 is exempt from charge if—

a

the transaction is effected by or under an enactment specified in the order, and

b

either the buyer or the seller is a public body.

Meaning of “reorganisation”

I3463

A “reorganisation” means changes involving—

a

the establishment, reform or abolition of one or more public bodies,

b

the creation, alteration or abolition of functions to be discharged or discharged by one or more public bodies, or

c

the transfer of functions from one public body to another.

Public bodies

I3474

The following are public bodies for the purposes of this schedule—

the Scottish Ministers,
a Minister of the Crown,
the Scottish Parliamentary Corporate Body,
a local authority,
the common services agency established under section 10(1) of the National Health Service (Scotland) Act 1978 (c.29),
a health board established under section 2(1)(a) of that Act,
Healthcare Improvement Scotland established under section 10A of that Act,
a special health board established under section 2(1)(b) of that Act,
any other authority that is the planning authority for any of the purposes of the planning Acts within the meaning of the Town and Country Planning (Scotland) Act 1997 (c.8),
a body (other than a company) that is established by or under an enactment for the purpose of carrying out functions conferred on it by or under an enactment,
a person prescribed for the purposes of this paragraph by the Scottish Ministers by order.

I3485

In this schedule, references to a public body include—

a

a company in which all the shares are owned by such a body, and

b

a wholly-owned subsidiary of such a company.

I3496

In paragraphs 4 and 5, “company” means a company as defined by section 1 of the Companies Act 2006.

F23SCHEDULE 16AVISITING FORCES AND INTERNATIONAL MILITARY HEADQUARTERS RELIEFS

(introduced by section 27)

Annotations:

Amendments (Textual)

F23

Schs. 16A-16C inserted (1.4.2015) by The Land and Buildings Transaction Tax (Addition and Modification of Reliefs) (Scotland) Order 2015 (S.S.I. 2015/93) , arts. 1(2) , 2(6)

The relief

1

A land transaction entered into with a view to any of the following is exempt from charge—

a

building or enlarging barracks or camps for a visiting force,

b

facilitating the training in Scotland of a visiting force,

c

promoting the health or efficiency of a visiting force.

2

Paragraph 1 has effect in relation to any designated international military headquarters as if—

a

the headquarters were a visiting force of a designated country, and

b

the members of that visiting force consisted of such of the persons serving at or attached to the headquarters as are members of the armed forces of a designated country.

3

In this schedule—

“designated” means designated by or under any Order in Council made for the purposes of section 74A of the Finance Act 1960 (relief from stamp duty land tax),
“visiting force” means any body, contingent or detachment of a country’s forces which is for the time being or is to be present in Scotland on the invitation of Her Majesty’s Government in the United Kingdom.

SCHEDULE 16BRELIEF FOR PROPERTY ACCEPTED IN SATISFACTION OF TAX

(introduced by section 27)

The relief

1

A land transaction entered into under section 9(4) of the National Heritage Act 1980 (disposal of property accepted by the Commissioners for Revenue and Customs in satisfaction of tax) by a person mentioned in section 9(2) of that Act is exempt from charge.

SCHEDULE 16CLIGHTHOUSES RELIEF

(introduced by section 27)

The relief

1

A land transaction entered into by or under the direction of the Secretary of State for the purposes of carrying into effect Part 8 (lighthouses) of the Merchant Shipping Act 1995 is exempt from charge.

2

A land transaction entered into by or under the direction of the Commissioners of Northern Lighthouses for the purposes of carrying on the services referred to in section 221(1) of the Merchant Shipping Act 1995 is exempt from charge.

SCHEDULE 17Partnerships

(introduced by section 49)

PART 1Overview

Overview

I350 1

1

This schedule makes provision about the application of this Act in relation to partnerships.

2

It is arranged as follows—

Part 2 makes general provision about the treatment of partnerships,
Part 3 makes provision about ordinary transactions involving a partnership,
Part 4 makes provision about transactions involving transfers from a partner or certain other persons to a partnership,
Part 5 makes provision about transactions involving transfers from a partnership to a partner or certain other persons (including transfers between partnerships),
Part 7 makes provision about transfers of interest in, and transactions involving, a property investment partnership,
Part 8 makes provision about the application of provisions of this Act on exemptions, reliefs, and notification to transactions falling within Parts 4 to 7,
Part 9 defines expressions used in this schedule.

PART 2General provisions

Meaning of “partnership”

I351 2

In this Act, “ partnership ” means—

a

a partnership within the Partnership Act 1890 (c.39),

b

a limited partnership registered under the Limited Partnerships Act 1907 (c.24),

c

a limited liability partnership formed under the Limited Liability Partnerships Act 2000 (c.12) or the Limited Liability Partnerships Act (Northern Ireland) 2002 (c.12 (N.I.)),

d

a firm or entity of a similar character to any of those mentioned in paragraphs (a) to (c) formed under the law of a country or territory outside the United Kingdom.

Chargeable interests treated as being held by partners etc.

I352 3

1

For the purposes of this Act—

a

a chargeable interest held by or on behalf of a partnership is treated as held by or on behalf of the partners, and

b

a land transaction entered into for the purposes of a partnership is treated as entered into by or on behalf of the partners,

and not by or on behalf of the partnership as such.

2

Sub-paragraph (1) applies notwithstanding that the partnership is regarded as a legal person, or as a body corporate, under the law of the country or territory under which it is formed.

Acquisition of interest in partnership not chargeable except as specially provided

I353 4

The acquisition of an interest in a partnership is not a chargeable transaction, notwithstanding that the partnership property includes land, except as provided by—

a

Part 4 of this schedule (transfer of chargeable interest to a partnership),

b

paragraph 17 (transfer of partnership interest pursuant to earlier arrangements), or

c

paragraph 32 (transfer of interest in property-investment partnership).

Continuity of partnership

I354 5

For the purposes of this Act, a partnership is treated as the same partnership notwithstanding a change in membership if any person who was a member before the change remains a member after the change.

Partnership not to be regarded as unit trust scheme etc.

I355 6

A partnership is not to be regarded for the purposes of this Act as a unit trust scheme or an open ended investment company.

PART 3Ordinary partnership transactions

Introduction

I356 7

This Part of this schedule applies to land transactions entered into as buyer by or on behalf of the members of a partnership, other than transactions within Parts 4 to 7 of this schedule.

Responsibility of partners

I357 8

1

Anything required or authorised to be done under this Act by or in relation to the buyer in the transaction is required or authorised to be done by or in relation to all the responsible partners.

2

The responsible partners in relation to a transaction are—

a

the persons who are partners at the effective date of the transaction, and

b

any person who becomes a member of the partnership after that date.

3

This paragraph has effect subject to paragraph 9 (representative partners).

Representative partners

I358 9

1

Anything required or authorised to be done by or in relation to the responsible partners may instead be done by or in relation to any representative partner or partners.

2

This includes making the declaration required by section 36 (declaration that return is complete and correct).

3

A representative partner means a partner nominated by a majority of the partners to act as the representative of the partnership for the purposes of this Act.

4

Any such nomination, or the revocation of such a nomination, has effect only after notice of the nomination, or revocation, has been given to the Tax Authority.

Joint and several liability of responsible partners

I359 10

1

Where the responsible partners are liable to make a payment of tax, the liability is a joint and several liability of those partners.

2

No amount may be recovered by virtue of sub-paragraph (1) from a person who did not become a responsible partner until after the effective date of the transaction in respect of which the tax is payable.

PART 4Transactions involving transfer to a partnership

Overview of Part

I360 11

This Part of this schedule is arranged as follows—

paragraphs 12 to 16 make provision about the treatment of certain land transactions involving the transfer of a chargeable interest to a partnership,
paragraphs 17 and 18 provide for certain events following such transactions to be treated as land transactions.

Circumstances in which this Part applies

I361 12

1

This Part of this schedule applies where—

a

a partner transfers a chargeable interest to the partnership,

b

a person transfers a chargeable interest to a partnership in return for an interest in the partnership, or

c

a person connected with—

i

a partner, or

ii

a person who becomes a partner as a result of or in connection with the transfer,

transfers a chargeable interest to the partnership.

2

This Part of this schedule applies whether the transfer is in connection with the formation of the partnership or is a transfer to an existing partnership.

3

In this Part of this schedule—

“ the land transfer ” means the transaction mentioned in sub-paragraph (1), and
“ the partnership ” means the partnership to which the chargeable interest is transferred.

4

This paragraph has effect subject to any election under paragraph 35.

Calculation of chargeable consideration etc.

I362 13

1

The chargeable consideration for the land transfer is taken to be equal to—

MV \times (100 - SLP) %

where—

MV is the market value of the interest transferred, and

SLP is the sum of the lower proportions determined in accordance with paragraph 14.

2

Paragraphs 8 to 10 (responsibility of partners) have effect in relation to the land transfer, but the responsible partners are—

a

those who were partners immediately before the transfer and who remain partners after the transfer, and

b

any person becoming a partner as a result of, or in connection with, the transfer.

3

This paragraph does not apply if the whole or part of the chargeable consideration for the land transfer is rent (see paragraph 29 (application of Parts 3 to 5 to leases)).

Sum of the lower proportions

I363 14

The sum of the lower proportions in relation to the land transfer is determined as follows.

Step 1 Identify the relevant owner or owners.
Step 2 For each relevant owner, identify the corresponding partner or partners. If there is no relevant owner with a corresponding partner, the sum of the lower proportions is nil.
Step 3 For each relevant owner, find the proportion of the chargeable interest to which the owner was entitled immediately before the land transfer. Apportion that proportion between any one or more of the relevant owner's corresponding partners.
Step 4 Find the lower of the following proportions (“the lower proportion”) for each corresponding partner—
1. a
  the sum of the proportions (if any) of the chargeable interest apportioned to the partner (at Step 3) in respect of each relevant owner,
2. b
  the partner's partnership share immediately after the land transfer.
Step 5 Add together the lower proportions for each corresponding partner. The result is the sum of the lower proportions.

Relevant owner

I364 15

1

For the purposes of paragraph 14 (see Step 1), a person is a relevant owner if—

a

immediately before the land transfer, the person was entitled to a proportion of the chargeable interest, and

b

immediately after the land transfer, the person is a partner or connected with a partner.

2

For the purposes of this paragraph and paragraph 14, persons who are entitled to a chargeable interest as joint owners are to be taken to be entitled to the chargeable interest as common owners in equal shares.

Corresponding partner

I365 16

PART 5Transactions involving transfer from a partnership

Overview of Part

I366 19

This Part of this schedule is arranged as follows—

paragraphs 20 to 26 make provision about certain land transactions involving the transfer of a chargeable interest from a partnership,
paragraph 27 makes special provision where the transaction involves a transfer from a partnership to a partnership,
paragraph 28 makes special provision where the partnership consists entirely of bodies corporate.

Circumstances in which Part applies

I367 20

1

This Part of this schedule applies where a chargeable interest is transferred—

a

from a partnership to a person who is or has been one of the partners, or

b

from a partnership to a person connected with a person who is or has been one of the partners.

2

For the purposes of this paragraph property that was partnership property before the partnership was dissolved or otherwise ceased to exist is to be treated as remaining partnership property until it is distributed.

3

In this Part of this schedule—

“ the land transfer ” means the transaction mentioned in sub-paragraph (1), and
“ the partnership ” means the partnership from which the chargeable interest is transferred.

4

This paragraph has effect subject to any election under paragraph 35.

Calculation of chargeable consideration

I368 21

1

The chargeable consideration for the land transfer is (subject to paragraph 28) taken to be equal to—

MV \times (100 - SLP) %

where—

MV is the market value of the interest transferred, and

SLP is the sum of the lower proportions determined in accordance with paragraph 22.

2

This paragraph does not apply if the whole or part of the chargeable consideration for the transaction is rent (see paragraph 29 (application of Parts 3 to 5 to leases)).

Sum of the lower proportions

I369 22

The sum of the lower proportions in relation to the land transfer is determined as follows.

Step 1 Identify the relevant owner or owners.
Step 2 For each relevant owner, identify the corresponding partner or partners. If there is no relevant owner with a corresponding partner, the sum of the lower proportions is nil.
Step 3 For each relevant owner, find the proportion of the chargeable interest to which the owner is entitled immediately after the land transfer. Apportion that proportion between any one or more of the relevant owner's corresponding partners.
Step 4 Find the lower of the following proportions (“the lower proportion”) for each corresponding partner—
1. a
  the sum of the proportions (if any) of the chargeable interest apportioned to the partner (at Step 3) in respect of each relevant owner,
2. b
  the partnership share attributable to the partner.
Step 5 Add together the lower proportions of each corresponding partner. The result is the sum of the lower proportions.

Relevant owner

I370 23

3

For paragraph 21 substitute—

21
The chargeable consideration for the land transfer is taken to be equal to the market value of the interest transferred.

4

In paragraph 27(2) and (3), for “21(1)” substitute “ 21 ” .

5

In paragraph 29—

a

in sub-paragraph (2), for “sub-paragraphs (3) to (6)” substitute “ sub-paragraph (5) ” ,

b

omit sub-paragraphs (3), (4), (6), (7) and (9).

6

Paragraph 22 provides for determining the sum of the lower proportions.

PART 6Application of Parts 3 to 5 to leases

b

in paragraph (b), for “the total of the annual rents” substitute “ the relevant chargeable proportion of the total of the annual rents ” .

7

For the purposes of schedule 19 as modified by this paragraph, the relevant chargeable proportion is—

(100 - SLP) %

where SLP is the sum of the lower proportions.

8

The following paragraphs apply for determining the sum of the lower proportions—

a

in the case of a transaction to which paragraph 12 applies, paragraph 14, and

b

in the case of a transaction to which paragraph 20 applies, paragraph 22.

9

In the case of a transaction to which paragraph 20 applies, this paragraph is subject to paragraph 28.

PART 7Property investment partnerships

Overview of Part

I375 30

This Part of this schedule is arranged as follows—

paragraphs 32 to 34 make provision about certain transactions involving the transfer of an interest in a property investment partnership,
paragraph 35 provides that a property investment partnership may elect to disapply paragraph 12 in relation to certain land transactions.

Meaning of “property investment partnership”

I376 31

Exclusion of market rent leases

I378 33

1

A lease held as partnership property immediately after a transfer of an interest in the partnership is not relevant partnership property for the purposes of paragraph 32(6) or (7) if the following four conditions are met.

2

The first condition is that—

PART 8Application of provisions on exemptions, reliefs and notification

Overview of Part

I380 36

This Part of this schedule is arranged as follows—

paragraph 37 makes general provision about the application of exemptions and reliefs to transactions mentioned in Parts 4 to 7 of this schedule,
paragraphs 38 and 39 makes provision about the application of group relief to certain transactions mentioned in Part 4 of this schedule,
paragraph 40 makes provision about the application of charities relief to certain transfers of interest in a partnership,
paragraph 41 makes provision about the notification of certain transfers of interest in a partnership.

Application of exemptions and reliefs: general

I381 37

1

Paragraph 1 of schedule 1 (exemption of transactions for which there is no chargeable consideration) does not apply to—

a

a transaction to which Part 4 applies,

b

a transaction to which Part 5 applies, or

c

a transfer of interest in a partnership which is treated as a land transaction by virtue of paragraph 17 or 32.

2

But subject to paragraphs 38 and 40 this schedule has effect subject to any other provision affording exemption or relief from the tax.

Application of group relief

I87 38

1

Schedule 10 (group relief) applies with the following modifications to—

a

a transaction to which Part 4 applies, and

b

a transfer of interest in a partnership which is treated as a land transaction by virtue of paragraph 17.

2

For paragraphs 14 and 15 substitute—

14
This paragraph applies where a partner who was a partner at the effective date of the transaction which is exempt from charge by virtue of this schedule (“the relevant partner” and “the relevant transaction” respectively) ceases to be a member of the same group as the seller—
a
before the end of the period of 3 years beginning with the effective date of the transaction, or
b
in pursuance of, or in connection with, arrangements made before the end of that period.
15
This paragraph applies where, at the time the relevant partner ceases to be a member of the same group as the seller (“ the relevant time ”), a chargeable interest is held by or on behalf of the members of the partnership and that chargeable interest—
a
was acquired by or on behalf of the partnership under the relevant transaction, or
b
is derived from a chargeable interest so acquired,
and has not subsequently been acquired at market value under a chargeable transaction for which group relief was available but was not claimed.

3

For paragraph 19(b), substitute—

b
what is held at the relevant time by or on behalf of the partnership and to the proportion in which the relevant partner is entitled at the relevant time to share in the income profits of the partnership.

4

In paragraphs 20 to F4942K, for “the buyer” (wherever appearing) substitute “ the relevant partner ” .

I382 39

1

This paragraph applies where in calculating the sum of the lower proportions in relation to a transaction (in accordance with paragraph 14)—

a

a company (“the connected company”) would have been a corresponding partner of a relevant owner (“the original owner”) but for the fact that paragraph 16 includes connected persons only if they are individuals, and

b

the connected company and the original owner are members of the same group.

2

The charge in respect of the transaction is to be reduced to the amount that would have been payable had the connected company been a corresponding partner of the original owner for the purposes of calculating the sum of the lower proportions.

3

The provisions of schedule 10 apply to the relief under sub-paragraph (2) as to group relief under paragraph 2 of that schedule, but—

a

with the omission of paragraph 5(a),

b

with the substitution for paragraphs 14 and 15 of—

14
This paragraph applies where a partner (“the relevant partner”) who was, at the effective date of the transaction which is exempt from charge by virtue of this schedule (“the relevant transaction”), a partner and a member of the same group as the transferor, ceases to be a member of the same group as the seller—
a
before the end of the period of 3 years beginning with the effective date of the transaction, or
b
in pursuance of, or in connection with, arrangements made before the end of that period.
15
This paragraph applies where, at the time the relevant partner ceases to be a member of the same group as the seller (“ the relevant time ”), a chargeable interest is held by or on behalf of the members of the partnership and that chargeable interest—
a
was acquired by or on behalf of the partnership under the relevant transaction, or
b
is derived from a chargeable interest so acquired,
and has not subsequently been acquired at market value under a chargeable transaction for which group relief was available but was not claimed.

c

with the other modifications specified in paragraph 38(3) and (4).

Application of charities relief

I383 40

1

Schedule 13 (charities relief) applies to the transfer of interest in a partnership that is a chargeable transaction by virtue of paragraph 17 or 32 with these modifications.

2

In paragraph 1, for “A land transaction is exempt from charge if the buyer is a charity” substitute “ A transfer of an interest in a partnership that is a chargeable transaction by virtue of paragraph 17 or 32 of schedule 17 is exempt from charge if the transferee is a charity ” .

3

For paragraph 2(a), substitute—

a
that every chargeable interest held as partnership property immediately after the transfer must be held for qualifying charitable purposes,

4

In paragraph 2(b), for “the buyer” substitute “ the transferee ” .

5

In paragraph 3, for “A buyer holds the subject-matter of a transaction for qualifying charitable purposes if the buyer holds it” substitute “ A chargeable interest is held for qualifying charitable purposes if it is held ” .

6

In paragraph 3(a), for “the buyer” substitute “ the transferee ” .

7

In paragraph 3(b), for “the buyer” substitute “ the partners ” .

8

For paragraph 4(b) substitute—

b
at the time of the disqualifying event the partnership property includes a chargeable interest—
i
that was held as partnership property immediately after the relevant transaction, or
ii
that is derived from an interest held as partnership property at that time.

9

In paragraph 5(a), for “the buyer” substitute “ the transferee ” .

10

For paragraph 5(b) substitute—

b
any chargeable interest held as partnership property immediately after the relevant transaction, or any interest or right derived from it, being used or held otherwise than for qualifying charitable purposes.

11

For paragraph 10 substitute—

10
An “ appropriate proportion ” means an appropriate proportion having regard to—
a
the chargeable interests held as partnership property immediately after the relevant transaction and the chargeable interests held as partnership property at the time of the disqualifying event, and
b
the extent to which any chargeable interest held as partnership property at that time becomes used or held for purposes other than qualifying charitable purposes.

12

After paragraph 17 insert—

18
There is a transfer of an interest in a partnership for the purposes of this schedule if there is such a transfer for the purposes of Part 3 of schedule 17 (see paragraph 48 of that schedule).
19
Paragraph 43 of schedule 17 (meaning of references to partnership property) applies for the purposes of this schedule as it applies for the purposes of that schedule.

Notification of transfers of partnership interests

I384 41

1

A transaction which is a chargeable transaction by virtue of paragraph 17 or 32 (transfer of partnership interest) is a notifiable transaction if (but only if) the consideration for the transaction exceeds the nil rate tax band.

2

The consideration for a transaction exceeds the nil rate tax band if—

a

the chargeable consideration, or

b

where the transaction is one of a number of linked transactions, the total of the chargeable consideration for all the linked transactions,

exceeds the nil rate tax band applicable to the transaction.

PART 9Interpretation

Introduction

I385 42

This Part of this schedule defines expressions used in this schedule.

Partnership property

I386 43

Any reference to partnership property is to an interest or right held by or on behalf of a partnership, or the members of a partnership, for the purposes of the partnership business.

Transfer of chargeable interest

I388 45

SCHEDULE 18Trusts

(introduced by section 50)

PART 1Overview

Overview

I393 1

1

This schedule makes provision about the application of this Act in relation to trusts.

2

It is arranged as follows—

Part 2 makes provision for the application of this Act to trusts generally,
Part 3 makes provision for the treatment of certain transactions involving bare trusts,
Part 4 makes provision for the treatment of certain transactions involving settlements,
Part 5 makes provision for the liability of trustees of a settlement to pay the tax and make returns and declarations,
Part 6 defines expressions used in this schedule.

PART 2Treatment of trusts and beneficiaries generally

Interests of beneficiaries under certain trusts

I394 2

Paragraphs 3 and 4 apply where property is held in trust—

a

under the law of Scotland, or

b

under the law of a country or territory outwith the United Kingdom,

on terms such that, if the trust had effect under the law of England and Wales, a beneficiary would be regarded as having an equitable interest in the trust property.

I395 3

The beneficiary is to be treated for the purpose of this Act as having a beneficial interest in the trust property despite the fact that no such interest is recognised by the law of Scotland or of the country or territory outwith the United Kingdom.

I396 4

An acquisition of the interest of a beneficiary under the trust is to be treated as involving the acquisition of an interest in the trust property.

PART 3Transactions involving bare trusts

Acquisition of chargeable interest by bare trustee

I397 5

Where a person (T) acquires a chargeable interest or an interest in a partnership as bare trustee, this Act applies as if the interest were vested in, and the acts of T in relation to it were the acts of the person or persons for whom T is trustee.

I398 6

However, any tax due by the person or persons may, without prejudice to any other method of recovery, be recovered from T.

I399 7

Paragraphs 5 and 6 do not apply in relation to the grant of a lease.

Grant of lease to bare trustee

I400 8

Where a lease is granted to a person as bare trustee, the person is to be treated for the purposes of this Act, as it applies in relation to the grant of a lease, as buyer of the whole of the interest acquired.

Grant of lease by bare trustee

I401 9

Where a person, as bare trustee, grants a lease, the person is to be treated for the purposes of this Act, as it applies in relation to the grant of a lease, as seller of the whole of the interest disposed of.

PART 4Transactions involving settlements

Acquisition by trustees of settlements

I402 10

Where persons, as trustees of a settlement, acquire a chargeable interest or an interest in a partnership, they are to be treated for the purposes of this Act, as it applies to that acquisition, as buyers of the whole of the interest acquired (including the beneficial interest).

Consideration for exercise of power of appointment or discretion

I403 11

Paragraph 12 applies where a chargeable interest is acquired by virtue of—

a

the exercise of a power of appointment, or

b

the exercise of a discretion vested in trustees of a settlement.

I404 12

Any consideration given for the person in whose favour the appointment was made or the discretion was exercised becoming an object of the power or discretion is to be treated for the purpose of this Act as the consideration for the acquisition of the interest.

Reallocation of trust property as between beneficiaries

I405 13

Paragraph 14 applies where—

a

the trustees of a settlement reallocate trust property in such a way that a beneficiary acquires an interest in certain trust property and ceases to have an interest in other trust property, and

b

the beneficiary consents to ceasing to have an interest in that other property.

I406 14

The fact that the beneficiary gives consent does not mean that there is chargeable consideration for the acquisition.

PART 5Settlements: payment of tax and returns

Liability to pay the tax

I407 15

Where the trustees of a settlement are liable to pay the tax, the payment may be recovered (but only once) from any one or more of the responsible trustees.

Liability to make returns

I408 16

A return in relation to a land transaction may be made by any one or more of the responsible trustees in relation to the transaction (the “relevant trustees”).

Duty to make declaration

I409 17

The declaration required by section 36(1) or (2)(a) must be made by all the relevant trustees.

Responsible trustees

I410 18

The responsible trustees, in relation to a land transaction, are—

a

the persons who are trustees at the effective date of the transaction, and

b

any person who subsequently becomes a trustee.

PART 6Interpretation

Meaning of “bare trust”

I411 19

In this schedule, a “bare trust”—

a

is a trust under which the property is held by a person as trustee—

i

for a person who is absolutely entitled as against the trustee, or who would be so entitled but for being under a legal disability by reason of non-age or under another disability, or

ii

for two or more persons who are or would be jointly so entitled, and

b

includes a case in which a person holds property as a nominee for another.

Meaning of “absolutely entitled”

I412 20

The references in paragraph 19 to a person being absolutely entitled to property as against the trustee are references to a case where the person has the exclusive right, subject only to satisfying any outstanding charge, lien or other right of the trustee—

a

to resort to the property for payment of duty, taxes, costs or other outgoings, or

b

to direct how the property is to be dealt with.

Meaning of “settlement”

I413 21

In this schedule, “ settlement ” means a trust that is not a bare trust.

SCHEDULE 19Leases

(introduced by section 52)

PART 1Introductory

Overview

I414 1

1

This schedule makes provision about the application of this Act in relation to leases.

2

It is arranged as follows—

Part 2 makes provision for the calculation of the tax chargeable in relation to chargeable consideration which consists of rent,
Part 3 makes provision about the calculation of the tax chargeable in relation to other chargeable consideration,
Part 4 makes provision for the review of tax chargeable at periodic intervals and on certain events,
Part 5 makes provision about chargeable consideration in relation to leases, including consideration which consists of rent, consideration other than rent and consideration that is not treated as chargeable consideration,
Part 6 makes provision about duration of leases and about the application of this Act to transactions involving leases generally.

Calculation of tax chargeable where chargeable consideration includes rent

I415 2

Where the chargeable consideration for a chargeable transaction to which this schedule applies consists of rent (or includes rent and chargeable consideration other than rent), the tax chargeable is the sum of—

a

any tax chargeable on so much of the chargeable consideration as consists of rent, and

b

any tax chargeable on so much of the chargeable consideration other than rent.

PART 2Amount of tax chargeable: rent

Tax rates and tax bands

I10 3

1

The Scottish Ministers must, by order, specify the tax bands and the percentage tax rates for each band applicable to chargeable consideration which consists of rent.

2

An order under sub-paragraph (1) must specify—

a

a nil rate tax band and at least one other tax band,

b

the tax rate for the nil rate tax band, which must be 0%, and

c

the tax rate for each tax band above the nil rate tax band so that the rate for each band is higher than the rate for the band below it.

Amount of tax chargeable in respect of rent

I416 4

The amount of tax chargeable on so much of the chargeable consideration as consists of rent is to be determined as follows.

Step 1 Calculate the net present value (NPV) of the rent payable over the term of the lease (see paragraph 6).
Step 2 For each tax band, multiply so much of the NPV as falls within the band by the tax rate for that band.
Step 3 Calculate the sum of the amounts reached under Step 2. The result is the amount of tax chargeable in respect of rent.

Amount of tax chargeable in respect of rent: linked transactions

I417 5

Where a chargeable transaction to which this schedule applies is one of a number of linked transactions for which the chargeable consideration consists of or includes rent, the amount of tax chargeable in respect of the rent is to be determined as follows.

Step 1 Calculate the total of the net present values (TNPV) of the rent payable over the terms of all the leases (see paragraph 6).
Step 2 For each tax band, multiply so much of the TNPV as falls within the band by the tax rate for that band.
Step 3 Calculate the sum of the amounts reached under Step 2. The result is the total tax chargeable in respect of rent.
Step 4 Divide the net present value of the rent payable over the term of the lease in question by the TNPV.
Step 5 Multiply the total tax chargeable in respect of rent by the fraction reached under Step 4. The result is the amount of tax chargeable in respect of rent for the lease in question.

Net present value

I418 6

The net present value (NPV) of the rent payable over the term of a lease is calculated by applying the following formula—

NPV = \sum_{i = 1}^{n} \frac{r_{i}}{{(1 + T)}^{i}}

where—

r _i is the rent payable in respect of year i,

i is the first, second, third etc. year of the term of the lease,

n is the term of the lease, and

T is the temporal discount rate (see paragraph 7).

Temporal discount rate

I419 7

1

For the purposes of this schedule the “temporal discount rate” is 3.5% or such other rate as may be specified by the Scottish Ministers by order.

2

An order under this paragraph may—

a

specify a rate or make provision for any such rate to be determined by reference to such rate or the average of such rates as may be referred to in the order,

b

provide for rates to be reduced below, or increased above, what they otherwise would be by specified amounts or by reference to specified formulae,

c

provide for rates arrived at by reference to averages to be rounded up or down, and

d

provide for circumstances in which alteration of a rate is or is not to take place.

PART 3Amount of tax chargeable: consideration other than rent

Amount of tax chargeable in respect of consideration other than rent: general

I420 8

b

if—

i

different amounts of rent are payable for different parts of the term, and

ii

those amounts (or any of them) are ascertainable at the effective date of the transaction,

the average annual rent over the term for which the highest ascertainable rent is payable.

8

In this paragraph “ relevant land ” means—

a

the land an interest in which is the main subject-matter of the transaction,

b

if the transaction in question is one of a number of linked transactions, any land an interest in which is the main subject-matter of any of those transactions.

PART 4Review of tax chargeable

Regular review of tax chargeable

I422 10

6

Where less tax is payable in respect of the transaction than has already been paid, the overpayment is to be repaid by the Tax Authority.

PART 5Chargeable consideration: rent and consideration other than rent

Rent

I424 12

1

For the purposes of this Act, a single sum expressed to be payable in respect of rent, or expressed to be payable in respect of rent and other matters but not apportioned, is to be treated as entirely rent.

2

Sub-paragraph (1) is without prejudice to the application of paragraph 4 of schedule 2 (chargeable consideration: just and reasonable apportionment) where separate sums are expressed to be payable in respect of rent and other matters.

Variable or uncertain rent

I425 13

3

The release of any such obligations as in mentioned in sub-paragraph (1) does not count as chargeable consideration in relation to the renunciation of the lease.

Assignation of lease: assumption of obligations by assignee

I428 16

In the case of an assignation of a lease the assumption by the assignee of the obligation—

a

to pay rent, or

b

to perform or observe any other undertaking of the tenant under the lease,

does not count as chargeable consideration for the assignation.

Loan or deposit in connection with grant or assignation of lease

I429 17

1

Where, under arrangements made in connection with the grant of a lease—

a

a tenant, or any person connected with or acting on behalf of the tenant, pays a deposit, or makes a loan, to any person, and

b

the repayment of all or part of the deposit or loan is contingent on anything done or omitted to be done by the tenant or on the death of the tenant,

the amount of the deposit or loan (disregarding any repayment) is to be taken for the purposes of this Act to be consideration other than rent given for the grant of the lease.

2

Where, under arrangements made in connection with the assignation of a lease—

a

the assignee, or any person connected with or acting on behalf of the assignee, pays a deposit, or makes a loan, to any person, and

b

the repayment of all or part of the deposit or loan is contingent on anything done or omitted to be done by the assignee or on the death of the assignee,

3

In a case where no land transaction return or any other return has been made in relation to the transaction, where the effect of sub-paragraph (2) in relation to the continuation of the lease for a period (or further period) of 1 year after the end of a fixed term is that the transaction becomes notifiable—

a

the buyer must make a return in respect of that transaction before the end of the period of 30 days beginning with the day after the end of that 1 year period,

b

the return must include an assessment of the tax that, on the basis of the information contained in the return, is chargeable in respect of the transaction, and

c

the tax so chargeable is to be calculated by reference to the tax rates and tax bands in force at the effective date of the transaction.

4

Sub-paragraph (3) is subject to paragraph 21.

5

For the purposes of section 30 (notifiable transactions), a lease to which this paragraph applies is a lease for its original fixed term.

6

Where—

a

a lease would be treated as continuing for a period (or further period) of 1 year under sub-paragraph (2), but

b

(ignoring that sub-paragraph) the lease actually terminates at a time during that period,

the lease is to be treated as continuing under sub-paragraph (2) only until that time; and the references in sub-paragraph (3) to that 1 year period are accordingly to be read as references to so much of that year as ends with that time.

Leases that continue after a fixed term: grant of new lease

I433 21

1

This paragraph applies where—

a

(ignoring this paragraph) paragraph 20 would apply to treat a lease (“the original lease”) as if it were a lease for a fixed term 1 year longer than the original term,

b

during that 1 year period the tenant under that lease is granted a new lease of the same or substantially the same premises, and

c

the term of the new lease begins during that 1 year period.

2

Paragraph 20 does not apply to treat the lease as continuing after the original fixed term.

3

The term of the new lease is treated for the purposes of this Act as beginning immediately after the original fixed term.

4

Any rent which, in the absence of this paragraph, would be payable under the original lease in respect of that 1 year period is to be treated as payable under the new lease.

5

Where the fixed term of a lease has previously been extended (on one or more occasions) under paragraph 20, this paragraph applies as if references to the original term were references to the fixed term as previously so extended.

Treatment of leases for indefinite term

I434 22

1

For the purposes of this Act (except section 30 (notifiable transactions))—

a

a lease for an indefinite term is treated in the first instance as if it were a lease for a fixed term of 1 year,

b

if the lease continues after the end of the term resulting from the application of paragraph (a), it is treated as if it were a lease for a fixed term of 2 years,

c

if the lease continues after the end of the term resulting from the application of paragraph (b), it is treated as if it were a lease for a fixed term of 3 years,

the agreement is substantially performed without a lease having been executed,

I438 29

Annotations:

Commencement Information

I72

Sch. 20 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Amendments (Textual)

F22

Words in sch. 20 inserted (1.4.2015) by The Land and Buildings Transaction Tax (Sub-sale Development Relief and Multiple Dwellings Relief) (Scotland) Order 2015 (S.S.I. 2015/123) , arts. 1(1) , 6(2)

Expression	Interpretation provision
acquisition	section 6
acquisition relief	section 65
bare trust	paragraph 19 of schedule 18
buyer	section 7
chargeable consideration	section 17 and schedule 2
chargeable interest	section 4
chargeable transaction	section 15
charities relief	section 65
company	section 65
completion	section 64
connected person	section 58
contingent	section 18
contract	section 65
conveyance	section 65
debt	paragraph 6(4) of schedule 1
disposal	section 6
effective date	section 63
employee	section 65
exempt interest	section 5
exempt transaction	section 16
group relief	section 65
jointly entitled	section 65
land transaction	section 3
land transaction return	section 65
linked transaction	section 57
main subject-matter	section 61
major interest in land	section 60
market value	section 62
net present value	paragraph 6 of schedule 19
nil rate tax band	section 24(2) and paragraph 3 of schedule 19
non-residential property	section 59(2)
notifiable transaction	section 30
partnership	paragraph 2 of schedule 17
personal representatives	section 65
property-investment partnership	paragraph 31 of schedule 17
reconstruction relief	section 65
registered social landlord	section 65
residential property	section 59(1)
making of a return	section 38
seller	section 7
settlement	paragraph 21 of schedule 18
subject-matter	section 61
F22sub-sale development relief	section 65
substantial performance	section 14
the tax	section 65
the Tax Authority	section 54
tax band	section 24 and paragraph 3 of schedule 19
tax rate	section 24 and paragraph 3 of schedule 19
unit trust scheme	section 45(5)
unit holder	section 45(5)

Land and Buildings Transaction Tax (Scotland) Act 2013

PART 1Land and buildings transaction tax

I291The tax

1

2

a

b

c

3

I302Overview

PART 2Key concepts

CHAPTER 1Land transactions and chargeable interests

Land transaction

I313Land transaction

Chargeable interest

I324Chargeable interest

1

2

a

b

3

I335Exempt interest

1

2

3

4

a

b

c

Acquisition and disposal of chargeable interest

I346Acquisition and disposal of chargeable interest

1

a

b

c

2

3

a

b

c

4

a

b

c

5

I357Buyer and seller

1

2

3

CHAPTER 2Provision about particular transactions

General rules for contracts requiring conveyance

I368Contract and conveyance

1

2

3

I28C129Completion without substantial performance

1

2

I18C910Substantial performance without completion

1

2

3

a

C4C3b

4

5

F245A

6

Contract providing for conveyance to third party

I1911Contract providing for conveyance to third party

1

a

b

2

3

4

5

6

F256A

7

I28 C129Completion without substantial performance

I18 C910Substantial performance without completion

C4 C3b