LBTT4022 - Further LBTT return where a relief is withdrawn

LBTT4022 - Further LBTT return where a relief is withdrawn

Where tax relief was claimed in respect of:

• certain acquisitions of residential property – see LBTT3012, LBTT3013 and LBTT3014;
• multiple dwellings – see LBTT3015;
• alternative finance investment bonds – see LBTT3021;
• group relief – see LBTT3025;
• reconstruction and acquisition relief – see LBTT3029;
• charities relief – see LBTT3035; or
• sub-sale development relief – see LBTT3044,

and it has been withdrawn, or is otherwise found not to have been due, to any extent, then the buyer must make a further LBTT return to Revenue Scotland.

The return must include an assessment of the amount of tax that is now chargeable, which is the amount of tax that would have been chargeable in relation to the transaction had the relief not been available. The return must be made before the end of 30 days beginning with the day after the date on which the relevant event occurred and tax due must be paid at the same time the return is made.

Guidance on How to make an LBTT return and pay tax is available separately on our website.

Relevant Event

The various relevant events that may lead to a withdrawal of a relief are described in the guidance for each of the reliefs, and are also listed in section 33(4) of the LBTT(S)A 2013.

Note: The date on which the relevant event occurs is the ‘relevant date’ for the purposes of the ‘relevant date’ field in the LBTT return.

Leases

Where a relief has been claimed on an original lease return, or an amendment to it, and has subsequently been withdrawn to any extent, a return under Section 33 is required. This return must include an assessment of the amount of tax that is now chargeable, which is the amount of tax that would have been chargeable in relation to the transaction had the relief not been available.

If a full relief was claimed initially no 3-yearly review returns will have been submitted. However, unless it was exempt, an original return will have been made with no tax due. Where this relief is withdrawn to any extent, a Section 33 return will be required. The submission of the Section 33 return will bring the lease into the 3-yearly review cycle as the buyer has now made a land transaction return under Paragraph 10(1)(a) of Schedule 19. The date the review is required will be the day falling on the third anniversary of the relevant event as per Section 33(4).

If a partial relief was claimed, 3-yearly review returns will be required to be submitted. Where this relief is withdrawn to any extent, a Section 33 return will be required and the 3-yearly review cycle will start from the relevant date. The date the next review is required will be the day falling on the third anniversary of the relevant date provided for in Section 33(4). The 3-yearly review cycle from the original return will be switched off. The next 3-yearly review cycle submitted after the Section 33 return will take into account any changes since that date and the figures in the 3-yearly review return will need to align to those given in the Section 33 return.

The tax chargeable is to be calculated by reference to the tax rates and tax bands in force at the effective date of the original transaction.