This relief is provided by the provisions of schedule 14 to the LBTT(S)A 2013.
Description of relief
Relief from LBTT is available where a local authority makes a Compulsory Purchase Order to acquire (whether or not by agreement) a property for the purpose of development by another party, typically a property developer.
As there are two transactions, in the absence of the relief, there would be two amounts of LBTT to be paid. But, so long as the development is being carried out by the property developer, the local authority can claim relief from LBTT when it buys the property under the first transaction.
The local authority must acquire the property by means of a Compulsory Purchase Order for the purpose of facilitating the undertaking or achievement of an activity or purpose set out in section 189 of the Town and Country Planning (Scotland) Act 1997 by a third party, which is ‘the development, redevelopment or improvement of land, or any other purpose which it is necessary to achieve in the interests of the proper planning of an area in which the land is situated’.
This relief is only available where a party other than a local authority develops the land. If the developer is the local authority, the relief is not available.
Claiming the relief
To claim this relief see the guidance on 'How to make a LBTT return and pay tax' which is available separately on our website.