Three-Year Review of Leases for Land and Buildings Transaction Tax

click to begin

Youtube

Welcome to Revenue Scotland's YouTube channel. This video provides an overview
of the three-year review of leases for Land and Buildings Transaction Tax.
Land and Buildings Transaction Tax replaced Stamp Duty Land Tax in Scotland on the 1st of
April 2015 and it may apply to anyone leasing
non-residential land or property in Scotland.
Where a notifiable lease has been granted on or after the 1st of April 2015, an LBTT
return must be submitted by the tenant. Leases are treated quite differently to
standard purchases of land and buildings for tax purposes. In most cases, when a
purchase is completed, any LBTT is paid and the title is registered and there is
no likelihood of change to the tax position. Leases, however, often continue
over a period of years and can be subject to change throughout. For example:
variations; extensions; assignations; rent reviews and tacit reallocation. And
the tax position must be reviewed to give effect to these changes.
The Land and Buildings Transaction Tax (Scotland) Act 2013 applies differently to how Stamp
Duty Land Tax applies in the rest of the UK as it requires the tenant in a lease
that has been subject to an LBTT return to submit a further return to
Revenue Scotland every three years. Ordinarily, this will be on every third
anniversary of the effective date of the lease i.e. years 3, 6, 9 etc. These further
returns will inform Revenue Scotland of any changes that have occurred since the
last LBTT return was submitted and to review the amount of tax chargeable on
the lease taking account of those changes. The tenant must recalculate the
tax using the rates and bands in force at the effective date of the lease.
If the tenant calculates that more tax is due, they must make payment of the
additional tax at the same time as the return is made. If it is calculated that
less tax is payable, a claim for repayment of tax should be submitted in
the LBTT return. A further return must still be submitted even if there
have been no changes to the lease or if no additional tax is payable.
Another event where a review return is required is upon assignation of a lease.
An assignation of a lease is the transfer by the tenant, the 'assignee', of
their interest under the lease to another party. Where a lease is assigned
the outgoing tenant, the 'assignor', must complete a further return.
After the effective date of the assignation, the 'assignee' assumes the 'assignor's' duties in
relation to LBTT. Anything that was done by the 'assignor' in relation to the lease
is to be treated as if it was done by the 'assignee'.
The final situation where a review return is required is upon termination of a lease. A further return
must be submitted by the outgoing tenant whether the lease terminates before the
end of the agreed term or on the natural expiry of the lease.
The requirement for tenants to submit further returns only applies to leases
which have been subject to an LBTT return. This means that leases agreed
under Stamp Duty Land Tax or Stamp Duty which have not been varied or extended
since the 1st of April 2015 are not brought in to charge for LBTT and
therefore the tenants in such leases are not required to submit further returns.
Similarly, where an LBTT return has been
submitted for a lease and that return includes a claim to a 100% relief, for
example, group relief, the tenant will not be obliged to complete a three-year
review return as long as that relief continues to apply to the transaction.
The tenant has 30 days from the date after the review date to file their LBTT
return. If the review date for a lease is the 1st of April 2018, the further
return must be submitted by the 1st of May 2018. Payment of tax must be made at
the same time as the return is filed. Payment can be made to Revenue Scotland
by BACS, CHAPS or cheque. If the return and payment are not made, or are not made
on time, then penalties and interest will apply.
That concludes this overview of three-year review of leases for Land and
Buildings Transaction Tax.
Please contact Revenue Scotland for any further information.
An Introduction to the LBTT Additional Dwelling Supplement How to claim an ADS Repayment Homeschooled People Answer Commonly Googled Questions About Homeschooling Jiren Powers Up ALL 3 Times Dragon Ball Super [4K Ultra HD] EDUCATING CHILDREN ABOUT CYSTIC FIBROSIS (3.20.18) Project Blue Screen; Fake Chemtrail Plane Images and More Watch Me TRIM My Hair | Layered Trim | Step by Step A New Rehab Baby Bobcat Betsy DeVos Finally Answers Congresswoman's Question, A Year Later | All In | MSNBC Power Rangers Super Ninja Steel - Stolen Compass | Episode 8 "Caught Red-Handed"

Three-Year Review of Leases for Land and Buildings Transaction Tax

Latest Posts