Welsh Revenue Authority LTT: Authorise an Agent for Welsh Revenue Authority Tax Affairs Guidance

This page provides guidance on authorising an agent or trusted helper to manage your tax affairs with the Welsh Revenue Authority (WRA).

• Explains the process of granting authority to an agent.
• Details the responsibilities of the authorised agent.
• Outlines the necessary documentation required for authorisation.
• Provides contact information for further assistance with the WRA.
• Includes links to related resources and forms.

Understanding the Land and Buildings Transaction Tax (LBTT) in Scotland

The Land and Buildings Transaction Tax (LBTT) is a tax applied to residential and commercial land and buildings 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 overview of LBTT, including its rates, exemptions, and how it compares to similar taxes in other parts of the UK.

What is LBTT?

LBTT is a tax payable when you buy or lease land or property in Scotland. It is administered by Revenue Scotland, which is responsible for ensuring the correct amount of tax is paid. The tax applies to both residential and non-residential transactions, with different rates and bands for each.

Residential Property Transactions

For residential properties, LBTT is calculated based on the purchase price of the property. The tax is structured in bands, meaning you pay a different rate of tax on each portion of the property price. Here are the current bands and rates for residential properties:

• 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 house 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 = £0 + £2,100 + £2,500 = £4,600

Additional Dwelling Supplement (ADS)

If you are purchasing an additional residential property, such as a second home or a buy-to-let investment, you may be liable to pay the Additional Dwelling Supplement (ADS). The ADS is an additional 4% on the total purchase price of the property. This is in addition to the standard LBTT rates.

Non-Residential Property Transactions

Non-residential properties, such as commercial buildings or land, have different LBTT rates and bands. The current rates are:

• 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:

• 0% on the first £150,000 = £0
• 1% on the next £100,000 (£150,001 to £250,000) = £1,000
• 5% on the remaining £150,000 (£250,001 to £400,000) = £7,500

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

Leases

LBTT also applies to leases of non-residential property. The tax is calculated based on the net present value (NPV) of the rent payable over the lease term. There is a separate LBTT calculator available on the Revenue Scotland website to help you determine the tax due on a lease.

Exemptions and Reliefs

There are certain circumstances where LBTT may not be payable, or where reliefs can reduce the amount of tax due. Some common exemptions and reliefs include:

• Transactions under £40,000 are exempt from LBTT.
• Charities may be eligible for relief on certain transactions.
• Group relief may be available for transfers within a group of companies.

For more detailed information on exemptions and reliefs, you can visit the Revenue Scotland LBTT page.

How LBTT Compares to SDLT and LTT

LBTT is similar to the Stamp Duty Land Tax (SDLT) in England and Northern Ireland, and the Land Transaction Tax (LTT) in Wales. However, there are differences in the rates and bands, reflecting the different property markets in each region.

For example, the starting threshold for SDLT on residential properties is £250,000, compared to £145,000 for LBTT. This means that buyers in Scotland may start paying tax on lower-priced properties than those in England and Northern Ireland.

Filing and Paying LBTT

When you purchase a property or land in Scotland, you must submit an LBTT return to Revenue Scotland, even if no tax is due. The return must be submitted, and any tax due paid, within 30 days of the effective date of the transaction, usually the date of completion.

Most people use a solicitor or conveyancer to handle the LBTT return and payment as part of the property purchase process. However, it is ultimately the buyer’s responsibility to ensure the return is submitted and the tax is paid on time.

Conclusion

The Land and Buildings Transaction Tax is an important consideration for anyone buying property or land in Scotland. Understanding how the tax is calculated and what exemptions or reliefs may apply can help you plan your purchase more effectively. For more detailed guidance and to access LBTT calculators, visit the Revenue Scotland website.

Useful article? You may find it helpful to read the original guidance here: Welsh Revenue Authority LTT: Authorise an Agent for Welsh Revenue Authority Tax Affairs Guidance

View all WRA LTT Guidance Pages Here