Can Revenue Scotland extend an LBTT review deadline, and should you agree?

Introduction

Taxpayers sometimes receive a request from Revenue Scotland asking for more time to complete a statutory review of an LBTT decision. A common concern is whether agreeing to an extension helps the taxpayer, or simply delays an expected refusal and refund denial.

This issue matters because review deadlines under the Revenue Scotland and Tax Powers Act 2014 are statutory. If Revenue Scotland wants more time, that usually requires the taxpayer’s agreement. The practical question is not only what the law says, but also whether agreeing, refusing, or proposing a shorter extension is the best tactical step.

The Question

A taxpayer asked for guidance after Revenue Scotland requested an extension to the deadline for issuing a review conclusion in an LBTT matter. The original review deadline was approaching, and Revenue Scotland proposed extending it by about five weeks due to staff absence and workload.

The taxpayer was concerned that:

• a five-week extension seemed excessive;
• refusing the extension might lead Revenue Scotland to reject the review without fully considering the evidence;
• agreeing to the extension might simply waste more time if the review was likely to be refused anyway; and
• if the matter was not resolved, the case would probably need to go to the Scottish tax tribunal system.

The taxpayer also raised a legal point from section 233 of the Revenue Scotland and Tax Powers Act 2014: that the review conclusion must normally be issued within 45 days unless both parties agree to extend the period.

Nick’s Explanation

Nick’s view was essentially practical rather than optimistic about the review outcome. In anonymised form, his reasoning was:

“Whether they conduct the review now or later, I expect they will reject your case, and then everything will need to escalate, taking the case to the equivalent of the first-tier tax tribunal in Scotland.”

He also noted that the eventual position may depend on:

• the amount of LBTT at stake;
• whether the case has wider significance as a precedent; and
• the actual condition of the property, especially in light of recent case law on whether a dwelling was suitable for use as a dwelling.

On the tactical question, Nick said that if he were in the taxpayer’s position, he would be inclined to allow the extra time. His concern was that refusing the extension might create unnecessary friction with the caseworker without materially improving the taxpayer’s chances.

On the separate question of how an enquiry is brought to an end, he explained in general terms that Revenue Scotland would usually close matters by issuing a closure notice, and that if an enquiry drags on, a taxpayer may be able to seek a tribunal direction requiring closure.

The Law

The key statutory provision mentioned here is section 233 of the Revenue Scotland and Tax Powers Act 2014. In broad terms, where a review has been requested, Revenue Scotland must notify the taxpayer of its conclusions within the statutory review period. That period is normally 45 days, unless a different period is agreed between Revenue Scotland and the taxpayer.

That means:

• Revenue Scotland cannot simply extend the review period unilaterally if the legislation requires agreement;
• the taxpayer can agree to the extension, refuse it, or seek to agree a shorter period; and
• the legal effect of the deadline should be checked carefully against the exact review mechanism engaged in the case.

In LBTT disputes, a separate but related issue often concerns whether the property was residential at the effective date of transaction, including arguments that the dwelling was not suitable for use as a dwelling. In that area, the threshold is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. A property does not fall outside the residential rules merely because it is in poor condition or requires substantial works. The condition must be serious enough, on the facts and evidence, to meet that demanding legal threshold.

Analysis

The legal and practical analysis can be broken down into four parts.

First, the taxpayer is right to focus on the statutory review period. If section 233 applies as stated, Revenue Scotland needs the taxpayer’s agreement to extend beyond the standard period. So the taxpayer is not obliged to accept a five-week postponement just because Revenue Scotland asks for one.

Second, refusing the extension does not necessarily improve the substantive merits of the case. If Revenue Scotland’s provisional view is already against the taxpayer, a refusal may simply bring forward an adverse review conclusion rather than avoid it. In many tax disputes, the review stage does not produce a change of position unless the evidence is particularly strong or the legal point is clear.

Third, agreeing to an extension may or may not be worthwhile depending on the strategic objective. If the taxpayer wants the quickest route to tribunal, refusing a long extension may be sensible. If the taxpayer wants to maximise the chance that the review officer will engage fully with the evidence, agreeing some additional time may be sensible. A middle course is often possible: the taxpayer can say that a long extension is not acceptable, but a shorter extension is.

Fourth, where the underlying LBTT argument depends on the property being uninhabitable or not suitable for use as a dwelling, expectations need to be realistic. After Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799, the condition threshold is relatively high. Serious disrepair alone may not be enough. The tribunal is likely to look closely at the actual physical state of the property on the effective date, supported by evidence such as surveys, photographs, contractor reports, utility condition, and whether the property could realistically function as a dwelling at that time.

So even if the taxpayer is procedurally correct about the review deadline, that does not mean the substantive appeal will succeed. The strength of the evidence remains central.

Outcome

The practical answer is that Revenue Scotland can only extend the review period if the taxpayer agrees, where section 233 requires agreement. So the taxpayer does not have to accept a five-week extension.

However, if the case is likely to be refused at review stage in any event, the decision becomes tactical rather than purely legal. A taxpayer may:

• agree to the full extension;
• refuse the extension and require the review to conclude within the statutory period; or
• offer a shorter extension as a reasonable compromise.

Nick’s practical view was that allowing extra time may avoid unnecessary antagonism, but he also recognised that the matter may still end up before the Scottish tribunal if Revenue Scotland maintains its position.

Practical Steps

If you are in this position, the sensible next steps are:

1. Check the exact statutory basis for the review and confirm the original deadline under section 233 of the Revenue Scotland and Tax Powers Act 2014.
2. Decide what your objective is: quickest escalation, best chance of internal reconsideration, or a balanced compromise.
3. If you do not want to allow the full extension, consider offering a shorter extension in writing.
4. Keep your response measured and professional. State that you are trying to be reasonable while preserving your statutory position.
5. Review the underlying merits carefully, especially if the case depends on the property being uninhabitable or unsuitable for use as a dwelling.
6. Gather evidence from the effective date of transaction, not just later repair evidence.
7. If Revenue Scotland ultimately refuses the review, prepare for a tribunal appeal and organise the evidence accordingly.
8. If an enquiry remains open for too long, consider whether an application to the tribunal for a direction to close the enquiry is available on the facts.

Conclusion

A taxpayer does not have to agree to a Revenue Scotland request for more time if the statute requires mutual agreement. But whether to refuse, accept, or shorten the extension is a tactical decision. In many LBTT disputes, especially those based on a property being uninhabitable, the real issue is the strength of the evidence and the now demanding legal threshold following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

Legal References Used

• Revenue Scotland and Tax Powers Act 2014, section 233
• 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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