Revenue Scotland LBTT: Guide to Completing ‘About the Transaction’ Section in Online LBTT Return Form

About the Transaction

This section provides guidance on completing the ‘About the Transaction’ part of the online Land and Buildings Transaction Tax (LBTT) return. It outlines essential information and steps to ensure accurate submission.

Understand the purpose of the ‘About the Transaction’ section in the LBTT return.
Learn the necessary details required for completion.
Follow step-by-step instructions for accurate data entry.
Ensure compliance with Revenue Scotland’s guidelines.

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Read the original guidance here:
Revenue Scotland LBTT: Guide to Completing ‘About the Transaction’ Section in Online LBTT Return Form

Understanding the Land and Buildings Transaction Tax (LBTT) in Scotland

The Land and Buildings Transaction Tax (LBTT) is a tax applied to residential and commercial land and property transactions in Scotland. Introduced in April 2015, it replaced the UK-wide Stamp Duty Land Tax (SDLT) in Scotland. This article aims to provide a comprehensive overview of LBTT, how it works, and how to complete the ‘About the Transaction’ section of the online LBTT return.

What is LBTT?

LBTT is a progressive tax, meaning the amount payable is based on the value of the property or land being purchased. It applies to both residential and non-residential transactions, including leases. The tax is designed to be fairer than its predecessor, SDLT, by ensuring that those purchasing higher-value properties pay a higher rate of tax.

Residential Property Rates

For residential properties, LBTT is calculated based on a series of tax bands. As of the latest rates, these bands are:

Up to £145,000: 0%
£145,001 to £250,000: 2%
£250,001 to £325,000: 5%
£325,001 to £750,000: 10%
Over £750,000: 12%

For example, if you purchase a home for £300,000, the LBTT would be calculated as follows:

0% on the first £145,000 = £0
2% on the next £105,000 (£145,001 to £250,000) = £2,100
5% on the remaining £50,000 (£250,001 to £300,000) = £2,500

Total LBTT = £0 + £2,100 + £2,500 = £4,600

Non-Residential Property Rates

For non-residential properties, including commercial properties and land, the rates are:

Up to £150,000: 0%
£150,001 to £250,000: 1%
Over £250,000: 5%

For example, if you purchase a commercial property for £500,000, the LBTT would be calculated as follows:

0% on the first £150,000 = £0
1% on the next £100,000 (£150,001 to £250,000) = £1,000
5% on the remaining £250,000 (£250,001 to £500,000) = £12,500

Total LBTT = £0 + £1,000 + £12,500 = £13,500

Additional Dwelling Supplement (ADS)

If you are purchasing an additional residential property, such as a second home or a buy-to-let property, you may be liable for the Additional Dwelling Supplement (ADS). This is an extra charge on top of the standard LBTT rates and is currently set at 4% of the total purchase price.

For example, if you buy a second home for £200,000, the ADS would be 4% of £200,000, which is £8,000. This amount would be added to the standard LBTT due on the property.

Completing the ‘About the Transaction’ Section of the LBTT Return

When submitting an LBTT return, one of the key sections to complete is the ‘About the Transaction’ section. This part of the return requires detailed information about the property transaction. Here’s a step-by-step guide on how to complete this section:

Step 1: Transaction Details

Provide the basic details of the transaction, including the date of the transaction and the effective date for LBTT purposes. The effective date is usually the date of completion or settlement.

Step 2: Property Details

Enter the address of the property being purchased. Ensure that the address is accurate and matches any legal documents related to the transaction.

Step 3: Consideration

State the total consideration for the transaction. This is the total amount paid for the property, including any non-monetary consideration such as goods or services exchanged as part of the deal.

Step 4: Type of Transaction

Select the type of transaction from the options provided. This could be a purchase, lease, or other type of property transaction.

Step 5: Additional Information

Provide any additional information required, such as whether the transaction involves a linked transaction or if there are any special conditions affecting the transaction.

For more detailed guidance on completing the LBTT return, visit the Revenue Scotland website.

Exemptions and Reliefs

There are certain exemptions and reliefs available under LBTT, which can reduce the amount of tax payable. Some common exemptions include:

Transactions involving charities
Transfers between spouses or civil partners
Certain transactions involving public bodies

Additionally, reliefs such as Multiple Dwellings Relief (MDR) and Group Relief may apply in specific circumstances. It is important to check whether any exemptions or reliefs apply to your transaction to ensure you are not overpaying LBTT.

Paying LBTT

LBTT must be paid within 30 days of the effective date of the transaction. Payment can be made online through the Revenue Scotland website. It is important to ensure that payment is made on time to avoid any penalties or interest charges.

Conclusion

Understanding LBTT is essential for anyone involved in property transactions in Scotland. By familiarising yourself with the rates, completing the LBTT return accurately, and being aware of any exemptions or reliefs, you can ensure compliance and avoid unnecessary costs. For more information and guidance, visit the Revenue Scotland website.