Guidance on LBTT Return Obligations and Situations Requiring Additional Submissions

LBTT Return Guidance

This page provides guidance on the rules for making a Land and Buildings Transaction Tax (LBTT) return. It includes an overview of situations that may necessitate submitting an additional LBTT return.

• Explanation of LBTT return requirements.
• Overview of circumstances requiring further returns.
• Guidance on compliance with LBTT regulations.
• Information on the process of submitting returns.
• Clarification of legal obligations under LBTT legislation.

Understanding the Duty to Make an LBTT Return

The Land and Buildings Transaction Tax (LBTT) is a tax applied to land transactions in Scotland. It is essential for individuals and businesses involved in property transactions to understand their obligations regarding LBTT returns. This article provides a comprehensive guide on the duty to make an LBTT return, including when it is required and how to complete it.

What is LBTT?

LBTT is a tax that replaced the UK Stamp Duty Land Tax (SDLT) in Scotland from 1 April 2015. It applies to residential and commercial land and buildings transactions. The tax is progressive, meaning the amount payable increases with the value of the property. For more information on LBTT, visit the Revenue Scotland website.

When is an LBTT Return Required?

An LBTT return is required in several situations, including:

• When a property is purchased or leased.
• When there is a lease variation that affects the amount of tax due.
• When a lease is assigned to another party.
• When a lease is terminated early.

In each of these situations, it is important to understand the specific requirements and deadlines for submitting an LBTT return to avoid penalties.

Property Purchases

When purchasing a property, an LBTT return must be submitted to Revenue Scotland within 30 days of the effective date of the transaction. The effective date is usually the date of completion, when the buyer takes possession of the property.

Leases

For leases, an LBTT return is required when a new lease is granted, or an existing lease is extended or varied. The return must be submitted within 30 days of the effective date of the lease transaction.

Lease Assignments

If a lease is assigned to another party, the assignee (new tenant) is responsible for submitting an LBTT return within 30 days of the assignment date.

Early Lease Terminations

In cases where a lease is terminated early, an LBTT return is required if the termination affects the amount of tax due. The return must be submitted within 30 days of the termination date.

How to Complete an LBTT Return

Completing an LBTT return involves several steps. Here is a step-by-step guide to help you through the process:

Step 1: Gather Necessary Information

Before starting the LBTT return, gather all necessary information, including:

• Details of the property or lease.
• Names and addresses of the buyer and seller, or landlord and tenant.
• The transaction date and effective date.
• The consideration (purchase price or rent) involved in the transaction.

Step 2: Access the Online Portal

LBTT returns are submitted through the Revenue Scotland online portal. You will need to create an account if you do not already have one. Visit the Revenue Scotland LBTT Online portal to get started.

Step 3: Complete the Return

Once logged in, follow the prompts to complete the LBTT return. Ensure all information is accurate and complete. The system will calculate the amount of tax due based on the information provided.

Step 4: Submit the Return

After completing the return, review it carefully before submitting. Once submitted, you will receive a confirmation and a unique reference number for your records.

Step 5: Pay the Tax

After submitting the return, the next step is to pay the tax due. Payment can be made through the Revenue Scotland online portal using various methods, including bank transfer and card payment.

Penalties for Late Submission

Failing to submit an LBTT return on time can result in penalties. The penalties increase the longer the return is overdue. It is important to submit the return and pay any tax due within the 30-day deadline to avoid these penalties.

Amending an LBTT Return

If you discover an error in your LBTT return after submission, you can amend it. Amendments can be made within 12 months of the filing date. Log in to the Revenue Scotland online portal and follow the instructions to amend your return.

Conclusion

Understanding the duty to make an LBTT return is essential for anyone involved in property transactions in Scotland. By following the guidelines outlined in this article, you can ensure compliance with LBTT regulations and avoid unnecessary penalties. For more detailed guidance, visit the Revenue Scotland LBTT guidance page.

Useful article? You may find it helpful to read the original guidance here: Guidance on LBTT Return Obligations and Situations Requiring Additional Submissions

View all LBTT Guidance Pages Here