From 1 April 2015, LBTT (Land and Buildings Transaction Tax) will replace SDLT (Stamp Duty Land Tax) in Scotland.  LBTT is structured differently to SDLT in that it is a progressive tax which means that each portion of the price is charged at different rates of tax for that portion rather than the whole price being charged at the same rate.

Commercial Rates

The rates for commercial property purchase or where a premium is payable are as follows:

Purchase Price   LBTT Rate

Up to £150,000 - 0%

Above £150,000 - to £350,000 3%

Above £350,000 - 4.5%

Rates for Commercial Leases

NPV of rent payable   LBTT Rate

Up to £150,000 - 0%

Above £150,000 - 1%

Residential Rates

Purchase Price   LBTT Rate

Up to £145,000 - 0%

Above £145,000-£250,000 - 2%

Above £250,000 to £325,000 - 5%

Above £325,000 to £750,000 - 10%

Over £750,000 - 12%

Whilst SDLT and LBTT are similar, LBTT has a number of key differences as follows:

- LBTT will be collected by Revenue Scotland, a new tax authority set up on 1 January 2015for the collection of devolved taxes.  Collection of the tax will be more closely linked toregistration of title.

- LBTT is payable at the same time as submitting the tax return.

- Returns must be submitted and the tax paid within 30 days of the effective date.

- LBTT places a positive obligation on the taxpayer to submit 3 yearly tax returns on leasesand submit balancing payments of tax to Revenue Scotland.  Penalties will apply where thetaxpayer fails to submit a tax return when required and if tax is due, interest may accrue.

- A number of reliefs for LBTT are the same as SDLT however, a new sub-sale developmentrelief has been introduced in Scotland

Should you have any queries or require any advice on how the tax changes may impact you pleasecontact Caren McNeil in our Commercial Department by email at This email address is being protected from spambots. You need JavaScript enabled to view it. or by telephone on 01224 581581.