Land and Buildings Transaction Tax - Additional Dwelling Supplement legislation changes: consultation

2 Summary Of Proposed Amendments

2.1 The following summary sets out the purpose of the proposed legislative amendments:

Timelines

Extend relevant timelines from 18 to 36 months, namely:

1. The time available to purchase a new main residence after disposing of a previous main residence.

2. The time available to dispose of a previous main residence after purchasing a new main residence.

3. The time period for considering whether a property was a buyer's only or main residence in the period prior to the purchase of a new main residence.

Inherited Property

1. Provide that properties inherited post-conclusion of missives on the purchase of a new main residence are disregarded for the purposes of the ADS.

2. Clarifying amendment in respect of point of ownership of an inherited property.

Small Shares

In the context of deemed ownership provisions, disregard property shares from consideration for ADS purposes where the individual taxpayer's share value is less than £40,000.

Divorce or Separation

Provide relief from the ADS on purchase of a main residence where an interest in a previous main residence (PMR) is required to be retained by court order.

Joint Buyers / Economic Unit Provisions

1. Where a main residence is purchased jointly, only one buyer can meet the relevant conditions (disposal of PMR that was their only main residence) and no additional relevant properties are held, both buyers treated as meeting the repayment conditions

2. Disposals of a PMR in the 36 months prior to purchase of a new main residence may be considered in determining if the ADS is repayable

3. Disposal of a property in which a buyer is deemed to have an interest, by virtue of the economic unit provisions, is to be treated as a disposal by the buyer.

Local Authorities

Provide relief for local authorities from LBTT and ADS where purchase funded under s2 of the Housing (Scotland) Act 1988.

2.2 Further detail of the proposals is set out in Section 3 and draft clauses for consideration are set out in Annex A.