The Scottish Government has published its consultation paper on the proposed replacement for stamp duty land tax ("SDLT") in Scotland.
The new tax, which will be known as the Land and Buildings Transaction Tax, will come into force in April 2015, at which time SDLT will cease to apply to property transactions in Scotland. It is the Scottish Government's stated intention to create a fairer tax that sits more comfortably with Scots property law and practices. The consultation paper sets out the Scottish Government's proposals on how the tax would operate and invites comments and suggestions on key areas including the structure of the tax. The Scottish Government's preferred structure is a progressive tax, similar to the structure of UK income tax, which it views as fairer than SDLT's "slab" approach, where the applicable rate of tax is charged on the whole price paid, not just the amount above the relevant threshold.
The consultation paper also invites comments and suggestions on a number of other areas including:
- how the tax may be structured to ensure that the calculation of tax payments due on commercial leases is better aligned with Scots property law and practices;
- whether the tax must be paid as a pre-requisite to registration of title;
- whether the legislation should include targeted anti-avoidance measures similar to those in the SDLT legislation;
- whether a general anti-avoidance rule should be put in place instead of, or in addition to, the proposed targeted anti-avoidance rules;
- the reliefs and exemptions that should be available;
- the treatment of partnerships and trusts; and
- whether the tax should be amended in the future to support key Scottish Government priorities.
The Scottish Government has confirmed that it will establish a new tax administration agency for assessing and collecting the Land and Building Transaction Tax, known as Revenue Scotland. It is proposed that Revenue Scotland will be established this year and will work closely with Registers of Scotland to administer the new tax.
Responses to the consultation should be submitted by Thursday 30 August 2012. The consultation document can downloaded from the Scottish Government's website here.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
