Guidance on LBTT Deferral Application Refusals by Revenue Scotland

Refusal of Application for Deferral of LBTT Payment

This section provides guidance on when Revenue Scotland can refuse an application to defer Land and Buildings Transaction Tax (LBTT) payments due to contingent or uncertain considerations. It outlines the principles and procedures involved in the refusal process.

• Explanation of circumstances leading to refusal of deferral applications.
• Details on contingent or uncertain considerations affecting LBTT payments.
• Procedures followed by Revenue Scotland post-refusal.
• Guidance on compliance and potential outcomes after refusal.

Understanding the Refusal of Deferral Applications for LBTT Payments

The Land and Buildings Transaction Tax (LBTT) is a tax applied to land transactions in Scotland. It is crucial for property buyers and sellers to understand the circumstances under which Revenue Scotland can refuse an application to defer payment of LBTT, especially when the consideration is contingent or uncertain. This article will explore the reasons for refusal, the process involved, and what happens after a refusal.

What is LBTT?

LBTT is a tax on land and property transactions in Scotland, replacing the UK Stamp Duty Land Tax in April 2015. It applies to both residential and commercial land and buildings transactions. The tax is progressive, meaning the rate increases with the value of the property.

For more detailed information on LBTT, you can visit the official Revenue Scotland LBTT page.

Deferral of LBTT Payment

In certain situations, taxpayers may apply to defer the payment of LBTT. This is particularly relevant when the consideration for the transaction is contingent or uncertain. For example, if the final price of a property depends on future events, such as planning permissions or future sales, the exact amount of tax due may not be immediately clear.

Contingent or Uncertain Consideration

Consideration is the total amount paid for a property. When this amount is not fixed at the time of the transaction, it is considered contingent or uncertain. In such cases, taxpayers can apply to defer the payment of LBTT until the consideration becomes certain.

Reasons for Refusal of Deferral Applications

Revenue Scotland may refuse an application to defer payment of LBTT for several reasons. Understanding these can help taxpayers prepare better applications and avoid unnecessary refusals.

Incomplete or Incorrect Information

One of the most common reasons for refusal is the submission of incomplete or incorrect information. Applications must be thorough and accurate, providing all necessary details about the transaction and the nature of the contingent or uncertain consideration.

Lack of Evidence

Applicants must provide sufficient evidence to support their claim of contingent or uncertain consideration. This may include contracts, agreements, or any other documentation that clearly outlines the conditions affecting the transaction’s value.

Failure to Meet Criteria

Revenue Scotland has specific criteria that must be met for a deferral application to be approved. If an application does not meet these criteria, it will likely be refused. It is essential for applicants to familiarise themselves with these requirements before submitting their application.

The Process of Refusal

When Revenue Scotland decides to refuse an application for deferral, they will notify the applicant in writing. This notification will include the reasons for refusal and any relevant information that the applicant may need to address if they wish to reapply.

Notification of Refusal

The notification will detail the specific reasons for refusal, allowing the applicant to understand where their application fell short. This is an important step, as it provides the applicant with the opportunity to correct any issues and resubmit their application if desired.

Options Following Refusal

After receiving a refusal, applicants have several options. They can choose to pay the LBTT as initially assessed, or they can address the issues outlined in the refusal notification and reapply for deferral. In some cases, it may be beneficial to seek professional advice to strengthen the application.

Reapplying for Deferral

If an applicant decides to reapply for deferral, it is crucial to address all the reasons for the initial refusal. This may involve gathering additional evidence, correcting any inaccuracies, and ensuring that the application meets all of Revenue Scotland’s criteria.

Gathering Additional Evidence

Applicants should review the reasons for refusal and gather any additional evidence that may support their claim. This could include updated contracts, new agreements, or any other documentation that clarifies the contingent or uncertain nature of the consideration.

Ensuring Compliance with Criteria

Before resubmitting an application, it is essential to ensure that it complies with all of Revenue Scotland’s criteria. This may involve reviewing the guidance provided by Revenue Scotland and seeking professional advice if necessary.

Conclusion

Understanding the reasons for refusal of deferral applications for LBTT payments is essential for anyone involved in property transactions in Scotland. By ensuring that applications are complete, accurate, and supported by sufficient evidence, taxpayers can increase their chances of a successful deferral application.

For further guidance on the deferral of LBTT payments and the application process, visit the official Revenue Scotland guidance page.

Useful article? You may find it helpful to read the original guidance here: Guidance on LBTT Deferral Application Refusals by Revenue Scotland

View all LBTT Guidance Pages Here