Welsh Revenue Authority LTT: Amend Land Transaction Tax return to claim multiple dwellings relief refund online.

This webpage provides guidance on amending a Land Transaction Tax (LTT) return to claim a refund through Multiple Dwellings Relief (MDR) on the GOV.WALES platform.

• It offers an online form for users to submit amendments.
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Understanding Land and Buildings Transaction Tax (LBTT) in Scotland

In Scotland, the Land and Buildings Transaction Tax (LBTT) is a tax applied to residential and non-residential land and property transactions. This tax is administered by Revenue Scotland and is a key consideration for anyone involved in buying or leasing property in Scotland. This article will provide an overview of LBTT, how it works, and what you need to know if you’re planning a property transaction.

What is LBTT?

LBTT is a tax that replaced the UK Stamp Duty Land Tax (SDLT) in Scotland on 1 April 2015. It applies to both residential and commercial property transactions. The tax is designed to be progressive, meaning the rate of tax increases with the value of the property or land being purchased. This approach aims to ensure that those purchasing higher-value properties contribute more in tax.

How is LBTT Calculated?

LBTT is calculated based on a series of tax bands, with different rates applied to different portions of the property price. For residential properties, the current rates (as of 2023) are:

• 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 purchase a residential property for £300,000, the LBTT would be calculated as follows:

• 0% on the first £145,000 = £0
• 2% on the next £105,000 (£145,001 to £250,000) = £2,100
• 5% on the remaining £50,000 (£250,001 to £300,000) = £2,500

Total LBTT = £4,600

For non-residential properties, the rates and bands differ slightly, reflecting the different nature of commercial property transactions.

Additional Dwelling Supplement (ADS)

In addition to the standard LBTT rates, there is an Additional Dwelling Supplement (ADS) for buyers purchasing an additional residential property, such as a second home or buy-to-let investment. The ADS is charged at 4% of the total purchase price and is payable on top of the standard LBTT rates.

For more detailed information on ADS, you can visit the Revenue Scotland website.

Multiple Dwellings Relief (MDR)

Multiple Dwellings Relief (MDR) is available for transactions involving more than one dwelling. This relief can reduce the amount of LBTT payable by calculating the tax based on the average price of the dwellings rather than the total price. This can be particularly beneficial for property developers or investors purchasing multiple properties in a single transaction.

To claim MDR, you must amend your LBTT return using the online form provided by Revenue Scotland. More information on how to claim MDR can be found on the Revenue Scotland website.

Filing and Payment

When you purchase a property in Scotland, you or your solicitor must submit an LBTT return to Revenue Scotland and pay any tax due within 30 days of the transaction. Failure to do so can result in penalties and interest charges. The return can be submitted online, and payment can be made via various methods, including bank transfer and cheque.

Exemptions and Reliefs

There are several exemptions and reliefs available under LBTT, which can reduce or eliminate the tax payable in certain circumstances. These include:

• First-time buyer relief: First-time buyers purchasing a property up to £175,000 are exempt from LBTT on the first £175,000 of the purchase price.
• Charity relief: Charities purchasing property for charitable purposes may be exempt from LBTT.
• Group relief: Transactions between companies within the same group may qualify for relief.

For a comprehensive list of exemptions and reliefs, visit the Revenue Scotland website.

Conclusion

Understanding LBTT is essential for anyone involved in property transactions in Scotland. By familiarising yourself with the rates, bands, and available reliefs, you can ensure that you are fully prepared for the tax implications of your purchase. Whether you are a first-time buyer, an investor, or a commercial property developer, taking the time to understand LBTT can help you make informed decisions and potentially save money on your property transactions.

For more detailed guidance and the latest updates on LBTT, visit the Revenue Scotland website.

Useful article? You may find it helpful to read the original guidance here: Welsh Revenue Authority LTT: Amend Land Transaction Tax return to claim multiple dwellings relief refund online.

View all WRA LTT Guidance Pages Here