Lease Transactions

Lease transaction general guidance

Land and Buildings Transaction Tax (LBTT) was introduced on 1 April 2015 and it may apply to anyone leasing non-residential land or property in Scotland. Where a notifiable lease has been granted on or after 1 April 2015 then an LBTT return must be submitted by the tenant.

Lease Transactions

The amount of LBTT due when you buy a new non-residential lease depends on the amount of rent you pay under the lease and the amount of any other chargeable consideration such as a lease premium.

Lease rates and bands

If the amount of the rent is over the non-residential LBTT threshold you may pay LBTT on the rent.

Lease transaction rates and bands for transactions on or after 07 February 2020

NPV of rent payable

Rate of tax to apply

Up to £150,000

0%

£150,001 to £2,000,000

1%

Above £2,000,000

2%

Lease transaction rates and bands for transactions prior to 07 February 2020

NPV of rent payable

Rate of tax to apply

Up to £150,000

0%

Above £150,000

1%

Lease Premiums

LBTT may also be payable on chargeable consideration other than rent included in the purchase price such as a premium payment. In such cases, the standard tax rates and bands for non-residential property transactions apply to any payments other than rent under a lease.

Please note: If the ‘relevant rent’ (in other words the average rent) is at least £1,000 per annum, the nil rate tax band does not apply in relation to the premium. All such consideration will be taxed at the tax rate of the next tax band.



 

Transactions on or after 25 January 2019

Purchase price

LBTT rate

Up to £150,000

0%

£150,001 to £250,000

1%

Above £250,000

5%

Transactions prior to 25 January 2019

Purchase price

LBTT rate

Up to £150,000

0%

£150,001 to £350,000

3%

Above £350,000

4.5%

 

Use the LBTT calculator to work out the amount of LBTT you need to pay on a lease transaction.

Calculate tax

For more information view our Legislative Guidance: