The CIOT has responded to the Scottish government’s call for evidence on the land and buildings transaction tax additional dwelling supplement (ADS). Key points include:
Timelines: the current 18-month deadline for sale of the main residence and the requirement to have lived in the old home for 18 months should both be extended to match the equivalent 36-month timelines that already apply in England and Wales, to ensure ADS is refunded in genuine property replacement situations.
Inherited property: ADS applies regardless of whether the new property is purchased or inherited. Changes should be made to reflect joint ownership of low-value properties, and the Scottish government should consider a three-year grace period during which inherited properties are ignored for ADS purposes.
Divorce/separation: relief from ADS should apply to avoid hardship when couples split up.
New cohabitees: the requirement for both parties to have lived in the old residence should be changed, given that joint buyers may well not have cohabited before the new purchase.
Other exceptional circumstances: Revenue Scotland should be given discretion to modify the ADS rules where taxpayers are unable to meet the various conditions for reasons beyond their control.
The CIOT has responded to the Scottish government’s call for evidence on the land and buildings transaction tax additional dwelling supplement (ADS). Key points include:
Timelines: the current 18-month deadline for sale of the main residence and the requirement to have lived in the old home for 18 months should both be extended to match the equivalent 36-month timelines that already apply in England and Wales, to ensure ADS is refunded in genuine property replacement situations.
Inherited property: ADS applies regardless of whether the new property is purchased or inherited. Changes should be made to reflect joint ownership of low-value properties, and the Scottish government should consider a three-year grace period during which inherited properties are ignored for ADS purposes.
Divorce/separation: relief from ADS should apply to avoid hardship when couples split up.
New cohabitees: the requirement for both parties to have lived in the old residence should be changed, given that joint buyers may well not have cohabited before the new purchase.
Other exceptional circumstances: Revenue Scotland should be given discretion to modify the ADS rules where taxpayers are unable to meet the various conditions for reasons beyond their control.
