SDLT No Longer Applies to Scottish Land Transactions from April 2015

SDLT and Scottish Leases Continued by Tacit Relocation

This archived HMRC material relates to an old SDLT issue for Scottish leases that carried on automatically by tacit relocation. It is mainly relevant for historic cases before April 2015, because SDLT no longer applies to Scottish land transactions from that date and was replaced by LBTT.

• Tacit relocation is when a Scottish lease continues automatically after its fixed term ends because neither party ends it properly in time.
• For historic SDLT cases, the key issue was whether that continuation created a notifiable land transaction or otherwise changed the tenant’s SDLT position.
• The official source provided here is very limited and mainly confirms that it is an archived example page from the old Scottish SDLT regime.
• Timing is critical: lease continuation before April 2015 may need SDLT analysis, while continuation from April 2015 onwards is generally dealt with under LBTT.
• It is important to distinguish between a lease continuing automatically by law and a genuinely new lease or fresh agreement, because the tax treatment may differ.

Scroll down for the full analysis.

SDLT and Scottish tacit relocation: archived example on lease continuation

This page concerns an old SDLT rule for Scottish leases that continued by tacit relocation. It matters mainly for historic transactions, because SDLT stopped applying to land transactions in Scotland from April 2015 and was replaced by Land and Buildings Transaction Tax. The source page itself is extremely limited, but its significance is that it sits within HMRC material on when a continued Scottish lease had to be notified for SDLT purposes.

What this rule is about

Under Scots law, a lease may continue automatically at the end of its fixed term if neither party brings it to an end in time. That continuation is known as tacit relocation.

For SDLT purposes, the key question was whether that continued occupation amounted to a further notifiable land transaction, or otherwise affected the tenant’s SDLT position. This was a technical issue because SDLT did not simply follow property law labels. The tax treatment depended on how the legislation treated the continuation of the lease.

The page provided here is an archived HMRC example page within that topic. It is not current guidance for Scottish transactions after SDLT ceased to apply there.

What the official source says

The source says only two substantive things:

• the page is an example dealing with continuation of a lease by tacit relocation
• the page is archived because, from April 2015, SDLT no longer applies to land transactions in Scotland, which instead fall within LBTT

So the official source does not set out the example itself in the text supplied here. It mainly signals that the material belongs to the historic SDLT regime for Scotland.

What this means in practice

If you are dealing with a Scottish lease that continued automatically before April 2015, HMRC’s old SDLT guidance on tacit relocation may still matter for checking whether a return should have been made, whether further tax could have arisen, or whether historic treatment was correct.

If the lease issue arises on or after the switch to LBTT, this archived SDLT page is not the governing regime. The correct analysis will usually need to be done under Scottish LBTT rules instead.

The practical point is therefore one of timing and tax regime:

• historic Scottish lease continuation before April 2015 may fall within SDLT
• Scottish lease continuation from April 2015 onwards is generally an LBTT matter, not an SDLT matter

How to analyse it

Where tacit relocation is relevant, the sensible starting questions are:

• Is the property in Scotland?
• Did the lease continuation happen before or after SDLT ceased to apply in Scotland in April 2015?
• Was there a fixed-term lease that ended without proper termination by either party?
• Did the lease continue automatically under Scots law, rather than under a newly negotiated express lease?
• For a historic SDLT case, what did the legislation and HMRC guidance in force at that time say about notification and any further charge?

That framework matters because not every continued occupation is the same. A lease may continue by operation of law, or the parties may actually grant a new lease, vary terms, or enter into a fresh agreement. Those differences can affect tax treatment.

Example

Illustration: a tenant took a fixed-term lease of Scottish premises that ended in 2014. Neither the landlord nor the tenant served valid notice to end it, and the tenant remained in occupation on the same basis. The first question is whether the lease continued by tacit relocation under Scots law. If it did, the next question is how the historic SDLT rules treated that continuation for notification purposes. If the same facts occurred after the April 2015 changeover, the issue would generally need to be considered under LBTT instead of SDLT.

Why this can be difficult in practice

Tacit relocation is a Scots law concept, but the tax consequences depend on the tax code that applied at the time. That can be difficult for three reasons.

First, the property law position and the tax treatment are related but not identical. A lease may continue in law, but the tax result still depends on the wording of the relevant SDLT or LBTT provisions.

Second, the supplied source is only an archived heading and warning note. It does not contain the underlying example, so it cannot by itself answer detailed questions about notification or tax calculation.

Third, transitional timing matters. Where a lease spans the period when Scotland moved from SDLT to LBTT, it is important to identify exactly when the relevant event happened and which regime applied.

Key takeaways

• This is archived SDLT material about Scottish lease continuation by tacit relocation.
• For Scottish land transactions from April 2015 onwards, SDLT no longer applies and LBTT is the relevant regime.
• The crucial practical questions are whether the lease continued automatically under Scots law and which tax regime applied at the time.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: SDLT No Longer Applies to Scottish Land Transactions from April 2015

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