Land and Buildings Transaction Tax (Scotland) Act 2013

JurisdictionScotland
Citation2013 asp 11


Land and Buildings Transaction Tax (Scotland) Act 2013

2013 asp 11

An Act of the Scottish Parliament to make provision about the taxation of land transactions.

[31 July 2013]

1 Land and buildings transaction tax

PART 1

Land and buildings transaction tax

S-1 The tax

1 The tax

(1) A tax (to be known as land and buildings transaction tax) is to be charged on land transactions.

(2) The tax is chargeable—

(a)

(a) whether or not there is an instrument effecting the transaction,

(b)

(b) if there is such an instrument, whether or not it is executed in Scotland, and

(c)

(c) whether or not any party to the transaction is present, or resident, in Scotland.

(3) The Tax Authority is to be responsible for the collection and management of the tax.

S-2 Overview

2 Overview

This Act is arranged as follows—

Part 2 makes provision for the key concepts underlying the tax including—

(a) which transactions are land transactions,

(b) which interests are, and which are not, chargeable interests in land,

(c) when a chargeable interest is acquired and the treatment of transactions involving contracts which require to be completed by conveyance as well as other kinds of transaction,

(d) which land transactions are, and which are not, chargeable transactions,

(e) what is, and what is not, chargeable consideration in relation to a chargeable transaction,

Part 3 makes provision for—

(a) the amount of tax payable,

(b) relief from the tax, and

(c) who is liable to pay the tax,

Part 4 provides for returns relating to land transactions and for the payment of the tax,

Part 5 contains provision about the application of the Act in relation to certain types of buyer, including companies, partnerships and trusts,

Part 6 contains provision about the application of the Act to leases and non-residential licences,

Part 7 contains general provision, including provisions about the Tax Authority and definitions of expressions used in the Act,

Part 8 contains provisions on subordinate legislation powers and commencement as well as other final provisions.

2 Key concepts

PART 2

Key concepts

CHAPTER 1

Land transactions and chargeable interests

Land transaction

Land transaction

S-3 Land transaction

3 Land transaction

A land transaction is the acquisition of a chargeable interest.

Chargeable interest

Chargeable interest

S-4 Chargeable interest

4 Chargeable interest

(1) A chargeable interest is an interest of a kind mentioned in subsection (2) which is not an exempt interest.

(2) The interests are—

(a)

(a) a real right or other interest in or over land in Scotland, or

(b)

(b) the benefit of an obligation, restriction or condition affecting the value of any such right or interest.

(3) In subsection (2), “land in Scotland” does not include land below mean low water mark.

S-5 Exempt interest

5 Exempt interest

(1) An interest is exempt if it is a security interest.

(2) In subsection (1) a “security interest” means a real right or other interest in or over land held for the purpose of securing the payment of money or the performance of any other obligation.

(3) See also paragraphs 21 to 24 of schedule 7 (which make additional provision about exempt interests in relation to alternative property finance arrangements).

(4) The Scottish Ministers may, by regulations, modify this section so as to—

(a)

(a) provide that a description of a real right or other interest in or over land is an exempt interest,

(b)

(b) provide that a description of a real right or other interest in or over land is no longer to be an exempt interest,

(c)

(c) vary a description of an exempt interest.

Acquisition and disposal of chargeable interest

Acquisition and disposal of chargeable interest

S-6 Acquisition and disposal of chargeable interest

6 Acquisition and disposal of chargeable interest

(1) Each of the following is an acquisition and a disposal of a chargeable interest—

(a)

(a) the creation of the interest,

(b)

(b) the renunciation or release of the interest,

(c)

(c) the variation of the interest (but not the variation of a lease).

(2) The variation of a lease is treated as an acquisition and a disposal of a chargeable interest only where paragraph 29 of schedule 19 (reduction of rent or term or other variation of lease) applies.

(3) A person acquires a chargeable interest where—

(a)

(a) the person becomes entitled to the interest on its creation,

(b)

(b) the person’s interest or right is benefitted or enlarged by the renunciation or release of the interest, or

(c)

(c) the person benefits from the variation of the interest.

(4) A person disposes of a chargeable interest where—

(a)

(a) the person’s interest or right becomes subject to the interest on its creation,

(b)

(b) the person ceases to be entitled to the interest on its being renounced or released, or

(c)

(c) the person’s interest or right is subject to or limited by the variation of the interest.

(5) Except as otherwise provided, this Act applies however the acquisition is effected, whether by act of the parties, by order of a court or other authority, by or under any enactment or by operation of law.

S-7 Buyer and seller

7 Buyer and seller

(1) The buyer, in relation to a land transaction, is the person who acquires the subject-matter of the transaction.

(2) But a person is treated as the buyer only where that person has given consideration for, or is a party to, the transaction.

(3) The seller, in relation to a land transaction, is the person who disposes of the subject-matter of the transaction.

CHAPTER 2

Provision about particular transactions

General rules for contracts requiring conveyance

General rules for contracts requiring conveyance

S-8 Contract and conveyance

8 Contract and conveyance

(1) This section applies where a contract for a land transaction is entered into under which the transaction is to be completed by a conveyance.

(2) A person is not regarded as entering into a land transaction by reason of entering into the contract.

(3) But see sections 9 and 10.

S-9 Completion without substantial performance

9 Completion without substantial performance

(1) If the transaction is completed without previously having been substantially performed, the contract and the transaction effected on completion are treated as parts of a single land transaction.

(2) In this case the effective date of the transaction is the date of completion.

S-10 Substantial performance without completion

10 Substantial performance without completion

(1) If the contract is substantially performed without having been completed, the contract is treated as if it were itself the transaction provided for in the contract.

(2) In this case the effective date of the transaction is when the contract is substantially performed.

(3) Where subsection (1) applies and the contract is subsequently completed by a conveyance—

(a)

(a) both the contract and the transaction effected on completion are notifiable transactions, and

(b)

(b) tax is chargeable on the latter transaction to the extent (if any) that the amount of tax chargeable on it is greater than the amount of tax chargeable on the contract.

(4) Where subsection (1) applies and the contract is (to any extent) afterwards rescinded or annulled, or is for any other reason not carried into effect, the tax paid by virtue of that subsection is to be (to that extent) repaid by the Tax Authority.

(5) That repayment must be claimed by amendment of the land transaction return made in respect of the contract.

(6) Where paragraph 25 of schedule 19 (leases) applies, it applies in place of this section.

Contract providing for conveyance to third party

Contract providing for conveyance to third party

S-11 Contract providing for conveyance to third party

11 Contract providing for conveyance to third party

(1) This section applies where a contract is entered into under which a chargeable interest is to be conveyed by one party to the contract (A) at the direction or request of the other (B)—

(a)

(a) to a person (C) who is not a party to the contract, or

(b)

(b) either to C or to B.

(2) B is not regarded as entering into a land transaction by reason of entering into the contract, but the following provisions have effect.

(3) If the contract is substantially performed, B is treated for the purposes of this Act as acquiring a chargeable interest, and accordingly as entering into a land transaction.

(4) In such a case, the effective date of the transaction is when the contract is substantially performed.

(5) Where the contract is (to any extent) afterwards rescinded or annulled, or is for any other reason not carried into effect, the tax paid by virtue of subsection (3) is to be (to that extent) repaid by the Tax Authority.

(6) Repayment must be claimed by amendment of the land transaction return made in respect of the contract.

(7) Subject to subsection (8), sections 8 to 10 do not apply in relation to the contract.

(8) Where—

(a)

(a) this section applies by virtue of subsection (1)(b), and

(b)

(b) by reason of B’s direction or request, A becomes obliged to convey a chargeable interest to B,

sections 8 to 10 apply to that obligation as they apply to a contract for a land transaction that is to be completed by a conveyance.

(9) Sections 8 to 10 apply in relation to any...

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