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Scottish Parliament Confirms Property Transaction Tax

27 June 2013   (0 Comments)
Posted by: Author: Amanda Banks
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Author: Amanda Banks

The Scottish Parliament has passed a Bill introducing the new Land and Building Transactions Tax, which replaces Stamp Duty with a new progressive tax structure more closely related to the value of a property.

The Bill follows limited tax bearing powers that were given to Scotland as part of the Scotland Act 2012, and is the first tax Bill to be passed in Scotland since 1705. The Scottish Parliament agreed to the principles of the Bill in April, and Parliamentary scrutiny continued during May and June. The passing of the Bill on June 25 represented the third and final stage of the Bill's passage.

Scotland's Finance Secretary John Swinney, who introduced the Bill into Parliament, described the move as an "innovative approach to taxation that is much better aligned with the Scottish market, with Scots law and practices, and the principle of progressive taxation." He claimed that the legislation would also be more efficient and less costly than the UK Government's approach.

The tax will be implemented from April 2015, and Swinney explained that the rates would be set nearer this time. However, he promised that the new system would support first-time buyers and families

The new tax will be collected by Revenue Scotland rather than HM Revenue and Customs. In May, HMRC confirmed to a Scottish Parliamentary committee that its IT system would be amended so that it would be impossible to pay Stamp Duty on a property with a Scottish postcode, and that "substantial performance" rules would prevent artificial delays in transactions in anticipation of the new tax.

The Bill was also praised by Malcolm Cannon, the chief executive of Scottish property firm ESPC. Cannon observed that "The progressive nature of the LBTT is to be particularly welcomed, as this will help smooth out the market distortions that are produced by Stamp Duty's 'slab' structure where a difference in selling price of one pound can in some cases lead to an extra tax burden in the thousands of pounds."


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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