Crofting Community Right to Buy: Tax Relief Rules and Calculation Details

SDLT relief for crofting community right to buy purchases

This relief applies to certain older Scottish land transactions where a crofting community body buys two or more crofts under the statutory crofting community right to buy. It does not cancel SDLT. Instead, it works out the SDLT rate by using the average price per croft, then applies that rate to the full purchase price.

• The relief is only available if the purchase is made under the crofting community right to buy and includes at least two crofts.
• To find the SDLT rate, divide the total consideration by the number of crofts bought and use the rate that matches that average figure.
• That rate is then applied to the whole transaction value, so SDLT is still charged on the full amount paid.
• The crofting community body is legally responsible for filing the SDLT return and paying the full SDLT due.
• The legislation does not explain how any SDLT cost should be split between individual crofters.
• This is a narrow transitional rule, so it is important to check that SDLT, rather than LBTT, still applies to the transaction.

Scroll down for the full analysis.

SDLT relief for crofting community right to buy transactions

This page explains a very specific Stamp Duty Land Tax relief for certain crofting community purchases in Scotland. The relief changes how the SDLT rate is worked out when a crofting community body buys two or more crofts under the statutory crofting community right to buy. It does not remove SDLT altogether. Instead, it uses a special averaging method to set the rate.

What this rule is about

The rule deals with transactions where a crofting community body acquires crofts using the crofting community right to buy under Part 3 of the Land Reform (Scotland) Act 2003.

The point of the relief is to prevent the SDLT rate from being driven up simply because several crofts are bought together in one transaction. Instead of looking only at the total price for all the crofts as a single block, the legislation works out the rate by reference to the average consideration per croft.

This is a narrow relief. The source material also states that this section only applies to a transaction effected in pursuance of certain contracts entered into on or before 1 May 2012, by virtue of the Scotland Act 2012. That timing point matters because SDLT ceased to apply to most Scottish land transactions once LBTT replaced it, subject to transitional rules.

What the official source says

The official material says the relief is available only if both of the following apply:

• the chargeable transaction is entered into in pursuance of a crofting community right to buy; and
• under that transaction, two or more crofts are being bought.

Where the relief applies, the SDLT rate is not determined in the usual way by looking directly at the total consideration for the whole transaction. Instead, the rate is found by dividing the total relevant consideration by the number of crofts being bought. In simple terms, you work out the average price per croft.

Once that average figure has been found, the SDLT rate that corresponds to that figure is then applied to the total consideration for the whole transaction.

The source also makes two practical points:

• the legislation does not provide rules for dividing the SDLT liability among the individual crofters; and
• the crofting community body is liable for the full amount of SDLT and must file the land transaction return, claiming the relief and including the tax payable.

What this means in practice

This relief is an averaging mechanism. It can reduce the SDLT rate that would otherwise apply where multiple crofts are acquired together for a single total price.

Without this rule, the total price for all the crofts might push the transaction into a higher SDLT rate band. With the relief, the rate is determined by the average price per croft instead. That lower rate is then used for the whole transaction value.

However, the tax is still charged on the full transaction consideration. The relief affects the rate-setting step, not the amount of consideration brought into charge.

The buyer for SDLT purposes is the crofting community body. So even if the transaction is intended to benefit a wider crofting community, the legal responsibility for the SDLT return and the full SDLT liability rests with that body.

How to analyse it

A sensible way to approach this relief is to ask the following questions:

• Is SDLT the relevant tax at all, rather than LBTT? The source expressly limits this material to certain transitional Scottish transactions.
• Is the purchase made in pursuance of the crofting community right to buy under Part 3 of the Land Reform (Scotland) Act 2003?
• Does the transaction involve the purchase of two or more crofts? If only one croft is being bought, this relief is not available.
• What is the total relevant consideration for the transaction?
• How many crofts are being bought under that transaction?
• What figure do you get when you divide the total consideration by the number of crofts?
• What SDLT rate would apply to that average figure?
• Apply that rate to the total consideration for the transaction.

You should also keep separate two different issues that can easily be confused:

• how the SDLT rate is calculated under the relief; and
• who is legally liable to pay the SDLT.

The source is clear that liability remains with the crofting community body, and the legislation does not tell you how any economic burden should be shared more widely.

Example

Illustration: a crofting community body buys four crofts in a single qualifying transaction for a total of £400,000. Under this relief, you first divide £400,000 by 4. That gives an average consideration of £100,000 per croft. You then identify the SDLT rate that corresponds to £100,000, and apply that rate to the full £400,000 transaction consideration.

The key point is that the average figure is used only to determine the rate. The tax is still charged by reference to the whole amount paid.

Why this can be difficult in practice

The main difficulty is usually not the arithmetic but the scope of the relief.

First, this is a tightly defined rule. It only applies to purchases made in pursuance of the statutory crofting community right to buy, and only where two or more crofts are bought. Whether a transaction is truly “in pursuance of” that right may depend on the legal basis of the acquisition.

Second, the source highlights a transitional limitation linked to the move from SDLT to LBTT in Scotland. So before applying this rule, it is necessary to confirm that SDLT still governs the transaction.

Third, the source says there are no legislative rules for dividing the SDLT amount between crofters. That means there may be a practical gap between the tax law position, which fixes liability on the crofting community body, and any private arrangements about who ultimately bears the cost.

Finally, the calculation depends on the number of crofts being bought under the transaction. In some cases, identifying exactly what counts as a croft for this purpose may need careful attention to the underlying land documentation and the statutory framework.

Key takeaways

• This relief applies only to certain SDLT-governed crofting community right to buy transactions involving two or more crofts.
• The SDLT rate is worked out by averaging the total consideration across the number of crofts, but that rate is then applied to the full transaction value.
• The crofting community body is responsible for the SDLT return and the full SDLT liability, and the legislation does not say how that liability should be shared among crofters.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Crofting Community Right to Buy: Tax Relief Rules and Calculation Details

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