Will ADS apply in Scotland if you buy a new home after separating but still own part of the former home?

Introduction

This is a common question after a separation. A person may have moved out of the former family home, be renting elsewhere, and want to buy a new home near their child or workplace. The difficulty is that they may still legally own a share of the former property.

In Scotland, that can trigger Additional Dwelling Supplement (ADS) on a new purchase, even if the buyer has no intention of returning to the former home. The answer depends on the exact statutory reliefs in Schedule 2A to the Land and Buildings Transaction Tax (Scotland) Act 2013, and those reliefs are narrower than many people expect.

The Question

An unmarried couple separate. One party moves out permanently and lives in rented accommodation. They still own half of the former home, while the other former partner remains living there. The departing owner now wants to buy a new home to live in as their only or main residence.

The question is whether that new purchase will be subject to ADS, and whether ADS can be avoided or reclaimed later.

Nick’s Explanation

Nick’s final view was that the result turns mainly on two points:

• whether the former couple were married or in a civil partnership; and
• whether the buyer still owns an interest in the former home at the end of the effective date of the new purchase.

In anonymised form, his explanation was:

“Relief in paragraph 9C only applies where the separating parties are spouses or civil partners. If the parties were never married or in a civil partnership, that route is not available.”

He also explained that for an unmarried former cohabitant:

“If the buyer purchases the new home now, ADS is payable. The only practical route to recovery is to dispose of their share in the former home within 36 months of the purchase.”

Nick further noted that disposal means genuinely coming off the title to the former home. Keeping a legal share while the former partner stays there will not usually solve the problem for unmarried cohabitants.

The Law

ADS in Scotland is governed by Schedule 2A to the Land and Buildings Transaction Tax (Scotland) Act 2013.

Broadly, ADS applies where, at the end of the effective date of the purchase, the buyer owns more than one dwelling and the transaction is not excluded by a statutory relief or replacement of main residence rule.

The key provisions relevant here are:

• paragraph 2 of Schedule 2A, which sets the basic charge to the additional amount;
• paragraph 8 of Schedule 2A, which allows repayment in certain replacement of main residence cases where the old main residence is disposed of after the new purchase; and
• paragraph 9C of Schedule 2A, which provides a specific exemption for separated spouses and civil partners who retain an interest in the former main residence under a qualifying court order or qualifying agreement.

Paragraph 9C is important but limited. It applies only where:

• the former home was previously the only or main residence of the buyer and their spouse, civil partner, former spouse or former civil partner;
• the former home remains the only or main residence of that spouse or civil partner;
• the parties do not intend to live together again; and
• the buyer retains their ownership interest under an order of a court or an agreement of the type referred to in Schedule 1 paragraphs 4 or 5.

That wording does not extend to unmarried cohabitants.

Where a reader is considering whether a property was so defective that it was not suitable for use as a dwelling, the threshold is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. Ordinary disrepair, inconvenience, or a need for renovation will often not be enough.

Analysis

Step one is to identify what the buyer owns at the end of the day of the new purchase.

If the buyer still owns a share in the former home and then buys another dwelling, they will usually own two dwellings at that point. That is the starting point for ADS.

Step two is to ask whether the new purchase is a replacement of the buyer’s only or main residence.

If the buyer has already disposed of the former main residence before buying the new one, ADS may not apply. But in this scenario, the buyer has not disposed of the former home. They still own part of it. So that straightforward replacement treatment is not available on day one.

Step three is to consider the special separation relief in paragraph 9C.

This is where many people assume there must be relief for all separating couples. However, the legislation is narrower. Paragraph 9C is directed at spouses and civil partners, including former spouses and former civil partners. It does not cover unmarried cohabitants merely because they lived together and had a child.

That means an unmarried buyer cannot normally rely on paragraph 9C, even if:

• the separation is genuine and permanent;
• the former partner continues to live in the old home;
• the buyer keeps paying the mortgage; or
• a later court process deals with financial matters between cohabitants.

Step four is to consider whether a later court order or later formal agreement can retrospectively remove ADS.

For unmarried cohabitants, the answer is generally no if the buyer is trying to rely on paragraph 9C. That relief is simply not drafted to include them. A later order under the Family Law (Scotland) Act 2006, section 28, does not convert them into spouses or civil partners, and it does not bring them within paragraph 9C.

Step five is to look at the repayment route under paragraph 8.

This is the workable route in many unmarried separation cases. If the buyer pays ADS on the new purchase, they may later reclaim it if they dispose of the former main residence within the statutory time limit. Nick correctly noted that the repayment window was extended from 18 months to 36 months with effect from 1 April 2024.

In practice, “dispose” means the buyer must cease to own their share in the former home. Examples include:

• selling their share to the former partner;
• transferring their share to the former partner, if legally effective; or
• joining in a sale of the whole property to a third party.

Simply moving out is not enough. Nor is an informal understanding that the former partner will keep living there. The ownership position must actually change.

Outcome

In the scenario described, the new purchase will generally be subject to ADS at the time of purchase if the buyer still owns part of the former home.

The special relief for separated spouses and civil partners in paragraph 9C will not usually help an unmarried former cohabitant.

If the buyer later fully disposes of their share in the former home within 36 months of buying the new home, they may then be able to reclaim the ADS under the replacement of main residence rules.

Practical Steps

A buyer in this position should work through the following points before exchange and completion:

• Confirm whether they are still on title to the former home at the date of the new purchase.
• Confirm whether they were ever married or in a civil partnership with the former partner. If not, paragraph 9C is unlikely to help.
• Check whether there is any realistic prospect of transferring or selling their share in the former home before or within 36 months after the new purchase.
• Keep evidence showing that the former home was previously their only or main residence and that the new property becomes their new only or main residence.
• If ADS is paid, monitor the 36-month deadline carefully and make any repayment claim promptly once the former home interest has been fully disposed of.
• Ensure the conveyancing paperwork and Land Register position clearly show when ownership of the former home ended.

Where the facts are more complex, such as trust arrangements, partial transfers, unusual title conditions, or questions over whether a property counts as a dwelling at all, the statutory wording should be checked closely against the transaction documents.

Conclusion

If an unmarried person in Scotland buys a new home after separation but still owns a share of the former home, ADS will usually be payable on the new purchase. A court-order based exemption is generally available only to spouses and civil partners. For unmarried cohabitants, the usual route to recovery is to pay ADS first and then dispose of the former home interest within 36 months so that a repayment can be claimed.

Legal References Used

• Land and Buildings Transaction Tax (Scotland) Act 2013, Schedule 2A
• Land and Buildings Transaction Tax (Scotland) Act 2013, Schedule 2A, paragraph 2
• Land and Buildings Transaction Tax (Scotland) Act 2013, Schedule 2A, paragraph 8
• Land and Buildings Transaction Tax (Scotland) Act 2013, Schedule 2A, paragraph 9C
• Land and Buildings Transaction Tax (Scotland) Act 2013, Schedule 1, paragraphs 4 and 5
• Family Law (Scotland) Act 2006, section 28
• Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799

This page was last updated on 22 March 2026.

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