Revenue Scotland LBTT: Guidance on Submitting and Amending LBTT Returns for Residential and Non-Residential Properties.

Making a Return – Residential / Non-Residential

This section provides guidance on submitting, amending, and paying Land and Buildings Transaction Tax (LBTT) returns for both residential and non-residential properties. It offers detailed instructions and resources for taxpayers to ensure compliance with LBTT regulations.

• Guidance on completing LBTT returns.
• Instructions for amending LBTT submissions.
• Information on payment procedures for LBTT.
• Links to further resources and detailed guidance documents.

Understanding Land and Buildings Transaction Tax (LBTT) in Scotland

Land and Buildings Transaction Tax (LBTT) is a tax applied to residential and non-residential property transactions in Scotland. It replaced the UK Stamp Duty Land Tax (SDLT) in Scotland on 1 April 2015. This article aims to provide a comprehensive guide to LBTT, including how it works, who it affects, and how to make a return.

What is LBTT?

LBTT is a tax payable on land and property transactions in Scotland. It is administered by Revenue Scotland, and the amount of tax you pay depends on the purchase price of the property or land. LBTT is designed to be more progressive than the previous SDLT, meaning that those purchasing higher-value properties pay a higher rate of tax.

How is LBTT Calculated?

LBTT is calculated using a tiered system, where different portions of the property price are taxed at different rates. This system is similar to income tax, where the first portion of the property price is taxed at the lowest rate, and the rate increases for each subsequent portion.

Residential Property Rates

• 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 buy a house for £300,000, the LBTT would be calculated as follows:

• The first £145,000 is taxed at 0% = £0
• The next £105,000 (from £145,001 to £250,000) is taxed at 2% = £2,100
• The remaining £50,000 (from £250,001 to £300,000) is taxed at 5% = £2,500

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

Non-Residential Property Rates

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

For example, if you purchase a commercial property for £400,000, the LBTT would be calculated as follows:

• The first £150,000 is taxed at 0% = £0
• The next £100,000 (from £150,001 to £250,000) is taxed at 1% = £1,000
• The remaining £150,000 (from £250,001 to £400,000) is taxed at 5% = £7,500

Total LBTT = £0 + £1,000 + £7,500 = £8,500

Additional Dwelling Supplement (ADS)

If you purchase an additional residential property in Scotland, such as a second home or buy-to-let, you may be liable to pay an Additional Dwelling Supplement (ADS). This is an extra charge on top of the standard LBTT rates. As of the latest update, the ADS rate is 4% of the total purchase price.

Making an LBTT Return

When you purchase a property or land in Scotland, you are required to submit an LBTT return to Revenue Scotland. This must be done even if no tax is due. The return can be submitted online through the Revenue Scotland website. It is important to ensure that the return is accurate and submitted on time to avoid penalties.

For more detailed guidance on making an LBTT return, you can visit the Revenue Scotland website.

Amending an LBTT Return

If you need to amend an LBTT return, you can do so within 12 months of the filing date. This might be necessary if there was an error in the original submission or if circumstances have changed. Amendments can also be made online through the Revenue Scotland website.

Paying LBTT

Once you have submitted your LBTT return, you must pay any tax due. Payment can be made online via bank transfer or by cheque. It is important to ensure that payment is made by the due date to avoid interest and penalties.

Exemptions and Reliefs

There are certain exemptions and reliefs available for LBTT. For example, certain transactions such as property transfers between spouses or civil partners may be exempt from LBTT. Additionally, first-time buyers purchasing a property up to £175,000 may be eligible for relief, reducing the amount of LBTT payable.

Conclusion

LBTT is an important consideration for anyone purchasing property or land in Scotland. Understanding how it works, how to make a return, and how to pay the tax can help ensure a smooth transaction process. For further information and guidance, the Revenue Scotland website is a valuable resource.

Useful article? You may find it helpful to read the original guidance here: Revenue Scotland LBTT: Guidance on Submitting and Amending LBTT Returns for Residential and Non-Residential Properties.

View all LBTT Guidance Pages Here