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Land and Buildings Transaction - Three-year review of leases

9th February 2018

From 1 April 2018 certain tenants in Scotland must submit a further tax return to Revenue Scotland to ensure they have paid the correct amount of Land and Buildings Transaction Tax.

What is Land and Buildings Transaction Tax?

Land and Buildings Transaction Tax (LBTT) replaced Stamp Duty Land Tax from 1 April 2015 and is payable on the purchase of residential and commercial land and buildings in Scotland. LBTT also applies to non-residential leases, including agricultural leases.

Generally, where a return for a lease has been made under the LBTT regime, a further return must be submitted to Revenue Scotland on every third anniversary of the effective date of the lease.

If more tax is payable at this point, payment must be made when the further return is submitted. Please note a further return must be submitted every three years, even if there have been no changes to the lease or if no further tax is payable.

A further return is also required when a lease is assigned from one party to another or when a lease comes to an end (whether that is before the end of the agreed term or on the natural expiry of the lease). Important tax changes for commercial leases

Who is responsible for submitting the return and paying any tax due?

The tenant is responsible for submitting the further return and for paying any tax due.

The return must be filed within 30 days of the date of the three year anniversary. If the further return is not submitted or tax is not paid on time, the tenant may be liable to penalties.

Call us on 0845 65 26 856 for further details or sign up now.

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