This guidance covers Land and Buildings Transaction Tax, its collection process on transfer of title, and how it affects the application process.
You'll need to pay Land and Buildings Transaction Tax on notifiable transfers of property.
For more detailed guidance on Land and Buildings Transaction Tax, see the Revenue Scotland website.
On 1 May 2012, the Scotland Act 2012 devolved to the Scottish Parliament the power to raise stamp duty on land and property and tax on landfill in Scotland.
From 1 April 2015, as a result of the provisions of the Land and Buildings Transaction Tax (Scotland) Act, 2013 (the LBTT Act), Land and Buildings Transaction Tax (LBTT) replaced Stamp Duty Land Tax (SDLT) for property transactions in Scotland.
Full guidance on LBTT and the process of submitting returns is available at revenue.scot.
The introduction of LBTT resulted in some key changes to the collection process for stamp duty on land and property from that under SDLT and also to the application process for deeds submitted for registration in the Land Register and the Books of Council and Session (Books of C&S).
Under LBTT, Revenue Scotland is responsible for the collection and management of LBTT but has delegated to the Keeper of the Registers of Scotland certain functions, relating to the administration of manual returns and cheque payments for LBTT.
Some key messages relating to these delegated functions:
- Paper LBTT returns and LBTT-related cheque payments can be submitted by post or hand-delivered to RoS' office at Meadowbank House, 153 London Road, Edinburgh, EH8 7AU. Where making a paper LBTT Return, any accompanying cheque for tax payment must be submitted to RoS in the same envelope.
- Cheques for payment of LBTT must be made out to Revenue Scotland.
- The monetary amount on a cheque for tax payment must match the tax amount on the LBTT Return.
- Separate cheques will be required for LBTT and for RoS registration fees - LBTT and RoS registration fees cannot be combined on one cheque.
- If making an LBTT Return electronically and selecting cheque as the method of payment, the cheque must be received by RoS by the third working day after the submission of the online LBTT return.
- If making an LBTT Return electronically and selecting cheque as the method of payment, the unique ID generated by the online system must be written on the back of the cheque. This unique ID should not, however, be added to any application form submitted to RoS.
- Under LBTT, there is no paper equivalent to the SDLT5 certificate to submit to RoS in order to evidence payment of LBTT.
The provisions of section 43(1) of the LBTT Act will have the effect of preventing the Keeper from accepting an application for registration of a document effecting or evidencing a notifiable transaction unless a land transaction return has been made in relation to that transaction and any tax payable in respect of that transaction has been paid (or where arrangements satisfactory to Revenue Scotland have been made for payment of the tax).
Revenue Scotland will provide the Keeper with details of all valid land transaction returns made online in order for the Keeper to assess whether the provisions of section 43(1) of the LBTT Act have been met for a relevant registration application. As a result, neither Revenue Scotland-generated acknowledgements of electronic LBTT Returns nor any other type of Revenue Scotland LBTT-related documentation require to be submitted to RoS along with related registration applications.
As an assist to the Keeper's duties under section 43(1) of the LBTT Act, the following LBTT-related questions have been added to the Land Register and Books of Council and Session (Books of C&S) application forms:
"Is the transaction to which this application relates a notifiable transaction in terms of section 30 of the Land and Buildings Transaction Tax (Scotland) Act 2013?
Yes or No
If yes, has a land transaction return been made, and have arrangements satisfactory to the tax authority been made for the payment of any tax payable in respect of the transaction?
Yes or No"
These LBTT-related questions must be answered for all applications submitted to RoS to register a document effecting or evidencing a notifiable transaction in either the Land Register or the Books of C&S.
Some key messages relating to these LBTT-related questions:
- A transaction will attract either SDLT or LBTT, but not both. Which tax is payable for a transaction will depend on the effective date for that transaction and this will determine how the LBTT-related questions should be answered.
- Where the effective date of a transaction is prior to 1 April 2015, SDLT will be payable and an SDLT5 certificate should be included with the relevant registration application registration. In this case, the answers to the LBTT-related questions should be given as "No/No".
- Where the effective date of a transaction is on or after 1 April 2015, LBTT will be payable (subject to the exception at the bullet point immediately following). In this case, the LBTT-related questions should be answered "Yes/Yes" only where either a valid LBTT Return has already been made online to Revenue Scotland and any tax payable in respect of the transaction paid (or arrangements satisfactory to Revenue Scotland made) or a paper LBTT Return and a cheque for any LBTT payable is being submitted to RoS in the same envelope as the registration application.
- Where missives for a transaction have been concluded before 1 May 2012 (the date on which the Scotland Act 2012 came into force) and the effective date of the transaction is on or after 1 April 2015, SDLT will continue to be payable and this should be declared on the application form in order to avoid the possibility of rejection. An SDLT5 certificate should also be included with the relevant registration application. In this case, the answers to the LBTT-related questions should be given as "No/No".
Transitional guidance on the introduction of Land and Buildings Transaction Tax can be found on gov.uk.
Books of Council and Session
A Books of C&S application form (the C&S1 form) must accompany an application to register a deed in the Books of C&S effecting or evidencing a notifiable transaction. This form is available for download from the RoS website and also online for completion by RoS eServices users.
The C&S1 form was introduced in order to assist with the Keeper's registration application compliance duties under section 43(1) of the LBTT Act for deeds to be registered in the Books of C&S effecting or evidencing a notifiable transaction. The mandatory use requirement for this form in such circumstances is as a result of the Land and Buildings Transaction Tax (Ancillary Provision) (Scotland) Order 2014, which Order prescribes that the Keeper need not accept an application for registration of such a deed in the Books of C&S unless the application provides that information that she reasonably requires to enable compliance with her duties under said section 43(1).
This form was introduced with the support and agreement of both the Lord President of the Court of Session and the Law Society of Scotland and, although its use is only mandatory in respect of notifiable transactions, the Keeper strongly encourages applicants to use it for all Books of C&S applications. Where it is unclear from the terms of the deed that the transaction is not notifiable, it would be of assistance if the applicant confirms the position on the C&S1 form.