In terms of section 43 of the LBTT(S)A 2013, the Keeper of the Registers of Scotland (RoS) may not accept an application for registration, in any of her registers, of a document effecting or evidencing a notifiable transaction unless a LBTT return has been made to us and any tax due has been paid. For this purpose, tax is treated as paid if arrangements satisfactory to us are made for payment of the tax (see LBTT4008).
In a standard house purchase this means that the disposition cannot be registered unless the LBTT position is in order. This is similar to the position applicable to stamp duty on dispositions pre-2003.
Leases over seven years (but not for more than 20 years) are generally notifiable but are not registrable in the Land Register. They may be registered in the Books of Council and Session and indeed, such registrations are customary (especially with short-term commercial leases).
The following questions relating to LBTT have been added by RoS to the relevant registration application forms:
‘Is the transaction to which this application relates a notifiable transaction in terms of section 30 of the Land and Buildings Transaction Tax (Scotland) Act 2013?
Yes or No
If yes, has a land transaction return been made, and have arrangements satisfactory to the tax authority been made for the payment of any tax payable in respect of the transaction?
Yes or No’
The second question relating to a LBTT return and arrangements satisfactory should only be answered ‘Yes’ where either a) a paper return is being submitted to Registers of Scotland along with the registration application or b) an acknowledgement of successful submission from us has already been obtained prior to the submission of the registration application to Registers of Scotland.
Although, in keeping with the Scottish Government's ‘Digital First’ agenda, we encourage the making of LBTT returns electronically, the facility to make a paper LBTT return provides flexibility for taxpayers and their agents and also allows for an alternative option for those not yet in a position to make returns electronically.