ADS return, payment and amendments
LBTT10050 - Paying the ADS and making an LBTT return
If a transaction is notifiable for LBTT, a return must be made to Revenue Scotland. This must be within 30 days of the effective date. The buyer must calculate and pay any LBTT due at the same time as submitting the return. When the ADS applies, you will include details of this in the LBTT return and make payment for the ADS alongside any payment due for LBTT.
Note: Where the sale of the previous main residence occurs after the effective date of the purchase of the buyer’s next main residence, but before an LBTT return has been made the ADS does not require to be paid. If the ADS has been paid and is no longer due you should follow the guidance at: LBTT10070 Amendments to return and repayment claims for the ADS.
For further guidance see:
https://revenue.scot/taxes/land-buildings-transaction-tax/lbtt-legislation-guidance/additional-dwelling-supplement-ads-technical/ads-return-payment-amendments#LBTT10070
- How to make an online LBTT return
- How to pay LBTT
- LBTT4002 Making an LBTT return
- LBTT4003 - Notifiable transactions
- LBTT4004 Duty to make an LBTT return
- LBTT4005 Liability for payment of tax
- LBTT(S)A 2013, Schedule 2A, paragraph 8
- Revenue Scotland and Tax Powers Act 2014, section 107 &115
LBTT10070 Amendments to returns and repayment claims for the ADS
Repayment of the ADS
Where the ADS has been paid and the buyer has been able to dispose of their previous main residence (PMR) within the appropriate timescales (see below), the buyer (or the agent acting on their behalf) may claim a repayment of the ADS paid.
- For transactions with an effective date up to and including 31 March 2024 the buyer has an 18-month period to dispose of the previous main residence.
- For transactions with an effective date on or after 1 April 2024 the buyer has a 36-month period to dispose of the previous main residence.
Criteria that must be met
For transactions with an effective date up to and including 31 March 2024, the legislation says that a repayment of the ADS may be claimed if all of the following repayment conditions are met:
- within the period of 18 months beginning with the day after the effective date of the transaction, the buyer disposes of the ownership of a dwelling (other than one that was or formed part of the subject-matter of the chargeable transaction),
- that dwelling [the dwelling that was disposed of] was the buyer's only or main residence at any time during the period of 18 months ending with the effective date of the transaction,
- the dwelling that was or formed part of the subject-matter of the transaction has been occupied as the buyers’ only or main residence.
For transactions with an effective date on or after 1 April 2024, the legislation says that a repayment of the ADS may be claimed if all of the following repayment conditions are met:
- within the period of 36 months beginning with or ending with the effective date of the transaction, the buyer or, where there are two or more buyers who are or will be jointly entitled to the interest acquired, one of the buyers disposes of the ownership of a dwelling (other than one that was or formed part of the subject-matter of the chargeable transaction), and
- that dwelling [the dwelling that was disposed of] was the buyer's or, where there are two or more buyers who are or will be jointly entitled to the interest acquired, one of the buyers’ only or main residence at any time during the period of 36 months ending with the effective date of the transaction, and
- the dwelling that was or formed part of the subject-matter of the transaction has been occupied as the buyer’s or, where there are two or more buyers who are or will be jointly entitled to the interest acquired, all of the buyers’ only or main residence, and
- where there are two or more buyers who are or will be jointly entitled to the interest acquired, each of whom own a dwelling or dwellings other than the subject-matter of the transaction, all of the buyers must meet these conditions.
In the tax case of MacQuarrie v Revenue Scotland the appellant sought repayment of ADS from Revenue Scotland as he had sold his previous main residence. However, the appellant did not manage to sell his previous main residence until more than three weeks after the relevant timescale had expired. The appellant explained that there had been a considerable delay in being able to market the property and conclude the sale because the property had cladding issues. Revenue Scotland refused the application for repayment of ADS, because the property had been sold outwith the relevant timescale. The appellant appealed to the tribunal, arguing that the delay was not a matter within the appellant’s control and the decision to refuse the repayment claim was unfair. The tribunal dismissed the appeal. The tribunal’s decision highlights that the legislation sets out the conditions which must be met and in this case those conditions were not met. The decision confirms that neither Revenue Scotland nor the Tribunal have discretion and they must apply the law as enacted.
Although decisions of the First-tier Tribunal are not binding, it is appropriate to have regard to them.
You can see all of decisions of the First-tier tribunal (Tax Chamber) here First-tier Tribunal for Scotland Tax Chamber.
Transactions where the calculation includes a claim for Multiple Dwellings Relief
In cases where a claim for Multiple Dwellings Relief (MDR) has been claimed as part of the transaction the amount of ADS paid would have been based on the average consideration and this would be the amount of ADS you could reclaim. Please check your MDR calculation to ensure you are reclaiming the appropriate amount of ADS – see our guidance at Multiple dwellings relief general guidance.
Evidence to support your claim
The extent and detail of the fact gathering required to establish that a property has been sold or otherwise disposed of; or whether a property is or has been a main residence will be determined by the specifics of the case. We will consider the relevant facts of each individual case so please provide us with as much relevant information as you can. We will consider any documentary evidence you can provide to support your claim, such as:
- a copy of signed disposition of sale
- a copy of Land Registration documents
- a letter from your solicitor that clearly states that the property has been sold and the date of entry
- a copy of a Council Tax bill
- a copy of a utilities bill
- a copy of bank statement
“Only or main residence” is not defined in the Act, but in the tax case of Crawley v Revenue Scotland the tribunal found that occupation of a property alone is not enough evidence, in itself, to establish residence and “there requires to be occupation, the nature, quality, length and circumstances of which are relevant factors in determining whether such occupation qualifies as residence. That is a question of fact and degree.”
Examples
In November 2023, Blue is selling their PMR (House 1) and purchasing their NMR (House 2). However, due to mortgage complications, the sale of their PMR is delayed. The purchase of House 2 goes ahead on the intended date. At the end of the effective date, Blue owns two dwellings and has not replaced their PMR. The ADS will apply.
In February 2024, Blue manages to sell their PMR (House 1). As this has taken place within the 18 month period beginning the day after the effective date for House 2, Blue will be able to claim a repayment of the ADS paid in November 2023.
Purple and Pink own a buy to let dwelling, but currently live in rented accommodation. They jointly buy House 2, which they intend to live in as their new main residence. They have not sold the buy-to-let. At the end of the effective date Purple and Pink own more than one dwelling and have not replaced their PMR, so the ADS will apply.
Six months later, Purple and Pink sell their buy-to-let property. They are disposing of a property they own, but it is not one which they used as their previous main residence at any time in the last 36 months, so they are not eligible for a repayment of the ADS paid. If they had used the buy-to-let as their main residence at any time during that 36 month period, they could have received the repayment.
Purple owns a current main residence (House 1) but will soon be jointly buying a New Main Residence (NMR – House 2) with their new civil partner, Blue. The effective date of the purchase of House 2 is 1 August 2023. Blue currently lives in separate rented accommodation and does not own any property. Purple cannot sell their Previous Main Residence (PMR – House 1) before the joint purchase of House 2 takes place in August. Therefore, at the end of the effective date of the transaction, Purple owns two dwellings and has not replaced their PMR. Therefore, the ADS will be payable. Blue is also deemed to own two dwellings by virtue of the economic unit provisions.
Once the PMR had been sold and a claim submitted for the ADS this would not be repayable as Blue had not resided in the PMR and had not replaced a PMR as he had resided in rented accommodation.
See our guidance at LBTT10061 - Transactions involving joint buyers.
Blue plans to sell their Previous Main Residence (PMR) (House 1) and purchase their New Main Residence (NMR) (House 2). However, due to mortgage complications, Blue’s sale of their PMR/House 1 is delayed. Blue’s purchase of House 2 goes ahead on the intended date. At the end of the effective date, Blue owns two dwellings and has not replaced their PMR. The ADS will be payable.
Six months later, despite recently buying House 2, due to a change in personal circumstances Blue sells House 2. This has taken place within the 36 month period beginning with the effective date for House 2. However, it was House 2 that triggered the payment of ADS , so it was House 2 that was the subject-matter of the chargeable transaction. To meet the ADS repayment conditions, the disposal must be of a property other than House 2. Accordingly, Blue will not be able to claim a repayment of the ADS previously paid.
Red and Green live together in their main residence (House 1), solely owned by Red. They are cohabitants. Green does not own any property. In July, they decide to sell their current main residence (House 1) and jointly purchase a property (House 2) which will replace their PMR. However, the sale of House 1 does not go through on time and at the end of the effective date of the purchase of House 2, Red will own two dwellings (and Green will be deemed to own two dwellings because of the economic unit provisions). The ADS will be payable as Red and Green own more than one dwelling and have not replaced their PMR.
Six months later, Red sells House 1. A repayment of the ADS can be claimed as they are cohabitants, one of the buyers has disposed of a dwelling that they owned (House 1) within 36 months of the effective date of House 2, both buyers lived in House 1 as their main residence and both Red and Green live in House 2 as their only or main residence.
Purple owns a current main residence (House 1) but will soon be jointly buying a New Main Residence (NMR – House 2) with their new civil partner, Blue. The effective date of the purchase of House 2 is after 1 April 2024. Blue currently lives in separate rented accommodation and does not own any property. Purple cannot sell their Previous Main Residence (PMR – House 1) before the joint purchase of House 2 takes place in August. Therefore, at the end of the effective date of the transaction, Purple owns two dwellings and has not replaced their PMR. Therefore, the ADS will be payable. Blue is also deemed to own two dwellings by virtue of the economic unit provisions.
Six months later, Purple sells House 1 and they now wish to claim a repayment of the ADS paid. As one of the buyers, Purple, has disposed of a dwelling that they owned (House 1) within 36 months of the effective date of House 2, Purple lived in House 1 as their main residence, both Purple and Blue live in House 2 as their only or main residence and because Blue did not own another dwelling, the repayment conditions have been met.
How to claim a repayment
A repayment can be claimed by either:
- amending the original LBTT return for the transaction if within the statutory 12 month amendment period set by section 83(2) of the RSTPA 2014 or,
- where the statutory amendment period has ended by making a claim for repayment of an overpayment of tax to us under section 107 of the RSTPA 2014 within 5 years of the tax return due date.
Our guidance how to claim a repayment of Additional Dwelling Supplement (ADS) confirms how to go about making a claim. This includes links to the online claim form and some videos which may help further.
Timescale for dealing with your claim
We aim to process the repayment claim within 10 working days and we will repay the ADS to you with interest (see the separate guidance on interest on repayments provided at RSTP4004.)
Please note, in some scenarios your request for repayment may take longer. This will depend on the nature of the repayment request and the supporting evidence. If we require further information or evidence to support your claim, we will ask for you this.
Revenue Scotland routinely conducts checks and may open enquiries to ensure the correct amount of tax has been paid and that any claim requests meet the relevant conditions for repayment. On these occasions we may withhold repayment pending the outcome of our enquiries.