The tenant must make an LBTT return to Revenue Scotland within 30 days beginning with the day after the review date (see LBTT6016). The date the LBTT is required to be made by is known as the ‘filing date’.
The further return must be made irrespective of whether there is a change in the tax that is payable.
A new LBTT return form will be available from 1 April 2018 and this should be used when an LBTT return for the three yearly review of a lease.
Guidance on how to make an LBTT return and pay tax is available separately on the Revenue Scotland website.
Note: The review date is the ‘relevant date’ for the purposes of the ‘relevant date’ field in the LBTT review return. The ‘effective date’ for a review return is the same as the effective date of the original return.
The LBTT return must include an assessment of the amount of tax chargeable at the review date, calculated using the tax rates and bands that were in force at the effective date of the original lease transaction (such as when the lease was granted or substantial performance took place as a result of the payment of rent or the tenant taking entry under any initial missives of let/agreement for lease). If changes are made to the rates and bands after the effective date of the lease, no account is to be taken of those changes for the purposes of calculating the tax due upon review of the lease.
If it is calculated that more tax is payable at the review date (for example, where rent reviews or turnover rents are more than previously estimated), payment of the additional tax due must be made at the same time as the LBTT review return is made.
If it is calculated that less tax is payable at the review date (for example, because the lease has been varied to reduce the spatial area of the premises subject to the lease and the rent has been reduced accordingly), then a claim for repayment of tax should be submitted in the LBTT review return.
Note: An LBTT review return must be submitted even if there have been no changes to the lease or if no additional tax is payable.
A tenant who fails to make an LBTT return to Revenue Scotland by the filing date is liable to a penalty (see RSTP3005). If the return contains an inaccuracy, the tenant may also be liable to a penalty (see RSTP3011).
A tenant who fails to pay tax prior to the expiry of 30 days after the date payment is due (the day the return is made) is liable to a penalty (see RSTP3008). Interest will be charged however on the amount of any unpaid tax from the filing date until the date it is paid (see RSTP4002).
A tenant required to make an LBTT return to Revenue Scotland, or who is the tenant in a land transaction which is not notifiable, is also required to keep and preserve certain records. See LBTT9001 for further guidance.