Revenue Scotland LBTT: Guidance on Submitting Further LBTT Returns When Relief is Withdrawn

LBTT Guidance on Further LBTT Return

This page provides guidance on submitting a further Land and Buildings Transaction Tax (LBTT) return when a relief is withdrawn. It outlines the necessary steps and considerations for compliance with LBTT regulations.

• Explanation of circumstances requiring a further LBTT return.
• Details on the withdrawal of relief and its implications.
• Instructions for completing and submitting the LBTT return.
• Key terms related to LBTT, such as relief and withdrawal.

Understanding Further LBTT Returns When Relief Is Withdrawn

The Land and Buildings Transaction Tax (LBTT) is a tax applied to residential and commercial land and buildings transactions in Scotland. It is crucial for individuals and businesses involved in property transactions to understand their obligations under this tax, especially when it comes to situations where a relief is withdrawn, necessitating a further LBTT return.

What Is LBTT?

LBTT is a tax that replaced the UK Stamp Duty Land Tax (SDLT) in Scotland from 1 April 2015. It is administered by Revenue Scotland and applies to both residential and non-residential property transactions. The tax is progressive, meaning that it is calculated based on the portion of the transaction value that falls within each tax band.

Understanding Reliefs in LBTT

Reliefs are provisions that reduce the amount of LBTT payable on a transaction. They are designed to support certain types of transactions or buyers, such as first-time buyers or certain types of property purchases. However, these reliefs are subject to specific conditions, and if these conditions are not met, the relief can be withdrawn.

Common Types of Reliefs

• First-time Buyer Relief: This relief is available for first-time buyers purchasing a residential property. It reduces the amount of LBTT payable, making it easier for individuals to enter the property market.
• Multiple Dwellings Relief: This relief applies when multiple residential properties are purchased in a single transaction. It allows for a reduction in the total LBTT payable.
• Charities Relief: Transactions involving charities may qualify for relief, reducing the tax burden on these organisations.

When Is a Further LBTT Return Required?

A further LBTT return is required when a relief that was initially claimed is later withdrawn. This can happen if the conditions for the relief are not met within a specified period. For example, if a property purchased with the intention of being a primary residence is not occupied as such within the required timeframe, the relief may be withdrawn.

Example Scenario

Consider a scenario where an individual purchases a property and claims First-time Buyer Relief. However, due to unforeseen circumstances, they are unable to occupy the property as their main residence within the specified period. In this case, the relief would be withdrawn, and a further LBTT return would be necessary to account for the tax that is now due.

Steps to Submit a Further LBTT Return

Submitting a further LBTT return involves several key steps. It is important to follow these steps carefully to ensure compliance with tax obligations:

1. Identify the Need for a Further Return: Determine whether the conditions for the relief have been met. If not, a further return is required.
2. Complete the Further LBTT Return Form: The form can be accessed and submitted through the Revenue Scotland website. Ensure all details are accurately filled out.
3. Calculate the Additional LBTT Due: Recalculate the LBTT liability without the relief. This will determine the additional amount payable.
4. Submit the Return and Pay the Additional Tax: Submit the completed form and pay any additional tax due by the deadline to avoid penalties.

Consequences of Not Submitting a Further LBTT Return

Failing to submit a further LBTT return when required can lead to significant consequences, including penalties and interest charges. It is essential to act promptly to rectify any issues with relief claims to avoid these outcomes.

Penalties and Interest

• Late Submission Penalty: A penalty may be imposed for failing to submit the return by the due date.
• Interest on Unpaid Tax: Interest may be charged on any unpaid tax from the date it was due until it is paid.

Resources and Support

For more information on LBTT and further returns, individuals and businesses can access a range of resources and support services:

• Revenue Scotland Guidance on Further LBTT Returns
• General Information on LBTT
• Contact Revenue Scotland for Assistance

Conclusion

Understanding the requirements for further LBTT returns is essential for anyone involved in property transactions in Scotland. By being aware of the conditions for reliefs and the steps to take if a relief is withdrawn, taxpayers can ensure compliance and avoid unnecessary penalties. For more detailed guidance, always refer to the official resources provided by Revenue Scotland.

Useful article? You may find it helpful to read the original guidance here: Revenue Scotland LBTT: Guidance on Submitting Further LBTT Returns When Relief is Withdrawn

View all LBTT Guidance Pages Here