In response to the Scottish government’s consultation on changes to the land and buildings transaction tax additional dwelling supplement (ADS), the CIOT welcomes the extended time limits, and urges the government to go further on how inherited properties are taken into account and on discretion to consider exceptional circumstances. Key points include:
Extending the time limits which determine whether transactions are subject to the ADS, from 18 to 36 months, will give purchasers welcome extra breathing space. ADS would then not bite where the new main residence is bought within 36 months of disposing of the previous main residence. Where the previous main residence is sold within 36 months of buying a new one, a repayment claim would be available.
Extending to 36 months the period for considering whether a property was a buyer’s only/main residence before the purchase of a new main residence is also welcome.
Inherited dwellings count towards the number of properties owned by a buyer for the purposes of ADS. The proposal to exclude properties inherited ‘post conclusion of missives’ but before the effective date of purchase of a new main residence is welcome, but excluding properties inherited in the three years before completion would be better and bring Scotland in line with the rest of the UK.
Giving Revenue Scotland the discretion to take into account extenuating individual circumstances (similar to HMRC’s power of discretion in relation to SDLT) is not included in the proposals but would seem fair and is recommended.
In response to the Scottish government’s consultation on changes to the land and buildings transaction tax additional dwelling supplement (ADS), the CIOT welcomes the extended time limits, and urges the government to go further on how inherited properties are taken into account and on discretion to consider exceptional circumstances. Key points include:
Extending the time limits which determine whether transactions are subject to the ADS, from 18 to 36 months, will give purchasers welcome extra breathing space. ADS would then not bite where the new main residence is bought within 36 months of disposing of the previous main residence. Where the previous main residence is sold within 36 months of buying a new one, a repayment claim would be available.
Extending to 36 months the period for considering whether a property was a buyer’s only/main residence before the purchase of a new main residence is also welcome.
Inherited dwellings count towards the number of properties owned by a buyer for the purposes of ADS. The proposal to exclude properties inherited ‘post conclusion of missives’ but before the effective date of purchase of a new main residence is welcome, but excluding properties inherited in the three years before completion would be better and bring Scotland in line with the rest of the UK.
Giving Revenue Scotland the discretion to take into account extenuating individual circumstances (similar to HMRC’s power of discretion in relation to SDLT) is not included in the proposals but would seem fair and is recommended.
