Guidance on LBTT Tax Relief for Land Transactions Involving Friendly Societies

LBTT relief for land transfers involving friendly societies

This relief can remove LBTT completely where Scottish land is transferred because of a specific statutory amalgamation or transfer of engagements involving a friendly society. It is a narrow relief, so it does not apply just because a friendly society is part of the transaction. The key issue is whether the land transfer is directly caused by, or happens as a result of, one of the qualifying legal processes under the Friendly Societies Acts.

• Full LBTT relief is available only for land transactions linked to certain statutory amalgamations or transfers of engagements involving friendly societies.
• A friendly society for this purpose means an incorporated friendly society or a registered friendly society under the relevant legislation.
• The transaction must be effected by, or happen in consequence of, a qualifying event under the Friendly Societies Act 1974 or 1992.
• Ordinary property purchases or later separate dealings do not qualify just because a friendly society is involved.
• In practice, the legal documents and the exact statutory route used are important to show the required link, and the relief must be claimed in the LBTT return.

Scroll down for the full analysis.

LBTT relief for land transfers involving friendly societies

This page explains a narrow LBTT relief for certain land transactions connected with friendly societies. Where the transaction happens because of a qualifying amalgamation or transfer of engagements under the friendly societies legislation, the transaction can be fully relieved from LBTT. The key point is that the relief is not for all transactions involving a friendly society. It applies only where the land transfer is effected by, or happens as a consequence of, specified statutory reorganisations.

What this rule is about

LBTT normally applies to chargeable land transactions in Scotland. This relief removes the LBTT charge where land passes as part of particular restructuring events involving friendly societies.

The relief is aimed at situations where property moves because friendly societies are combining or transferring their business under statutory procedures, rather than because land is being bought and sold in the ordinary way.

For this purpose, a “friendly society” takes the meaning used in section 116 of the Friendly Societies Act 1992. The source material says this means an incorporated friendly society or a registered friendly society.

What the official source says

The official guidance states that full relief is available for a land transaction that is effected by, or in consequence of, any of the following:

• an amalgamation of two or more registered societies under section 82 of the Friendly Societies Act 1974;
• an amalgamation of two or more friendly societies under section 85 of the Friendly Societies Act 1992;
• a transfer of engagements between registered societies under section 82 of the Friendly Societies Act 1974;
• a transfer of engagements between friendly societies under section 86 of the Friendly Societies Act 1992; or
• a transfer of the engagements of a friendly society under a direction given by the appropriate authority under section 90 of the Friendly Societies Act 1992.

The guidance also notes that:

• “appropriate authority” has the meaning given by section 119(1) of the Friendly Societies Act 1992; and
• “registered”, in relation to a friendly society, has the meaning given by section 111 of the Friendly Societies Act 1974.

The relief is provided by schedule 13A to the Land and Buildings Transaction Tax (Scotland) Act 2013, inserted by the Land and Buildings Transaction Tax (Addition and Modification of Reliefs) (Scotland) Order 2015.

What this means in practice

The practical question is not simply whether a friendly society is involved. The real question is whether the land transaction happens because of one of the specific statutory events listed above.

If it does, the transaction is exempt from charge. In other words, full relief can be claimed so that no LBTT is payable on that land transaction.

This matters most where land or buildings in Scotland move from one society to another as part of a formal amalgamation or transfer of engagements. Without relief, that transfer could potentially fall within LBTT. The relief prevents a tax charge arising merely because property has to be moved to give effect to the statutory reorganisation.

The wording “effected by or in consequence of” is important. It suggests the relief can cover not only the direct transfer required by the amalgamation or transfer of engagements, but also transactions that occur as a consequence of that statutory process. However, the connection must still be real and grounded in the qualifying event. It is not a general relief for later or separate property dealings by a friendly society.

How to analyse it

A sensible way to approach the issue is to ask the following questions:

• Is there a land transaction in Scotland that would otherwise fall within LBTT?
• Does the transaction involve a body that is a friendly society within the statutory meaning?
• Is the transaction linked to one of the specific statutory events listed in the relief?
• Was the transaction effected by that event, or did it happen as a consequence of it?
• Is the transaction part of the statutory amalgamation or transfer of engagements, rather than a separate commercial acquisition or disposal?

In practice, the documents and legal mechanics will matter. A conveyancer or tax adviser would usually want to identify the exact statutory route being used under the Friendly Societies Act 1974 or 1992, and then check whether the property transfer arises from that route.

The official guidance also says the relief must be claimed through the LBTT return process.

Example

Illustration: two friendly societies carry out a formal amalgamation under the relevant friendly societies legislation. As part of that amalgamation, Scottish property held by one society is transferred to the successor body. If that land transfer is effected by, or happens in consequence of, the qualifying amalgamation, the transaction can qualify for full LBTT relief.

By contrast, if after the amalgamation the successor body later buys a different Scottish property in an ordinary purchase, that later purchase would not qualify merely because a friendly society is involved. The relief is tied to the qualifying amalgamation or transfer of engagements.

Why this can be difficult in practice

The source material is brief, and the main area of judgement is likely to be the link between the land transaction and the statutory event.

In particular, the phrase “effected by or in consequence of” can raise factual questions. A direct transfer required by the amalgamation is the clearest case. Harder cases may arise where the transaction is one step removed, or where there are several connected transactions and it is not obvious which ones truly result from the statutory process.

Another practical difficulty is that the relief depends on specific legislation governing friendly societies. A transaction may look like a reorganisation in commercial terms but still fall outside the relief if it is not carried out under one of the listed statutory provisions.

The guidance also does not set out detailed procedural rules on evidence or how Revenue Scotland would test the connection in marginal cases. That means the underlying statutory documents and the legal basis for the reorganisation are likely to be important.

Key takeaways

• This is a targeted LBTT relief for land transactions arising from specified amalgamations or transfers of engagements involving friendly societies.
• The involvement of a friendly society on its own is not enough; the transaction must be effected by, or in consequence of, one of the listed statutory events.
• Where the conditions are met, full relief can be claimed through the LBTT return process.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guidance on LBTT Tax Relief for Land Transactions Involving Friendly Societies

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