The liability to pay LBTT in respect of a chargeable transaction rests with the buyer. The buyer in relation to a land transaction is the person(s) who acquires (or is a party to the acquisition of) the subject-matter of the transaction in return for a consideration (i.e. payment is given to acquire the subject-matter from the seller). For the purposes of the creation of and most other transactions involving leases, the buyer is the tenant, although the landlord can be the buyer on a renunciation or where he pays the tenant for certain variations.
An acquisition can take the form of the creation, renunciation, release or variation of an interest in land but not the variation of a lease except where paragraph 29 of schedule 19 to the LBTT(S)A 2013 applies. See LBTT6028
- the tenant gives the landlord consideration in money or money’s worth for the variation of a lease, but the rent and the terms of the lease do not change, the variation is treated as an acquisition of a chargeable interest by the tenant;
- the variation of a lease reduces the rent, it is treated as an acquisition of a chargeable interest by the tenant; or
- the variation of a lease reduces the term of the lease, it is treated as an acquisition of a chargeable interest by the landlord.
Nature of acquisition
If you are a buyer, you acquire a chargeable interest when an existing interest is transferred, for example a shop is sold and the buyer acquires title to the shop property. A tenant also acquires a chargeable interest that has been created, for example, when a new lease for a shop is granted and the tenant acquires the lease. If the buyer’s interest is altered by renunciation or release from an interest, this is also an acquisition of a chargeable interest. For example, when a tenant surrenders a lease back to the landlord, the landlord acquires the interest.
If there are joint buyers (two or more buyers who are or will be entitled either jointly or in common to the interest in land), any liability in relation to LBTT is a joint and several liability of all the buyers. Any obligation of a buyer in relation to LBTT is an obligation of all the buyers but may be discharged by any of them. Only one LBTT return is required and this can be completed by any one of the buyers. However, each buyer must make a declaration that the LBTT return is complete and correct.
Specific rules also apply for joint buyers involving partnerships and trusts.
The seller is the person(s) who disposes of (i.e. sells) the subject matter of the transaction. For the purposes of leases, the seller is the landlord.