Revenue Scotland

Thursday 15 January 2015

Susan MacInnes, Head of Corporate Services at Revenue Scotland gives our members the low down on their progress ahead of the introduction of LBTT.

Revenue Scotland was established as a non-ministerial department of the Scottish Administration on 1 January 2015 and is preparing to administer Scotland’s devolved taxes from 1 April 2015. The two devolved taxes are Land and Buildings Transaction Tax (LBTT) – a replacement for Stamp Duty Land Tax (SDLT) - and Scottish Landfill Tax.

With under three months until we go live, significant steps are being taken to ensure that the organisation is ready. The Board has been appointed and key operational posts have been filled and the new IT system is being tested by external users.

The process for submitting a self-assessment LBTT return and paying the tax is similar to the existing system for SDLT in that there is an online form and payment can be made by bank transfer. As with SDLT, the tax return must be submitted and arrangements made to pay the tax before an application for registration of title will be accepted by the Keeper of the Registers of Scotland. It is expected therefore that in the great majority of cases it will be the solicitor acting for the purchaser/taxpayer who will deal with the LBTT return and payment on their behalf.

The final rates and bands for LBTT are still subject to parliamentary approval. However a tax calculator based on the proposed rates and bands can be found on our website www.revenue.scot. The new rates will only be payable on the portion of the total value which falls within each band.

Differences in rates between SDLT and LBTT

• No tax is payable on the first £135,000 of every residential transaction

• No tax is payable on the first £150,000 of every commercial transaction or non-residential lease.

• Thereafter LBTT is levied at a different rate on each band on a cumulative basis.

Later this month, Revenue Scotland will host the first in a series of country-wide roadshow events. These will give solicitors and others who will be responsible for making for making LBTT returns the chance to meet with Revenue Scotland staff and discuss the taxes with them. Full details of the roadshows, along with the draft guidance relating to the taxes, can be found on our website, www.revenue.scot.