A land transaction occurs when someone acquires a chargeable interest in land. All references to land in this guidance should be taken as to also include buildings situated on land, unless specifically stated otherwise. A standard house purchase is a land transaction, as are commercial and agricultural transactions falling within the statutory description.
A chargeable interest is a real right (that is to say, a right which is enforceable against everyone, not just one person) or other interest in or over land in Scotland.
A chargeable interest is also the benefit of an obligation, restriction or condition affecting the value of such a right or interest over land in Scotland. The definition is very broad and captures more than the real rights in land known to Scots law; accordingly, for example, options in relation to land (see LBTT1007) and interests in property-holding partnerships (see LBTT7011) are chargeable interests.
A chargeable interest is an interest in land, so this would not include an interest in relation to moveable property such as fittings (e.g. curtains, carpets and furniture), boats or artwork. When it comes to determining the chargeable consideration, permanent fittings such as fitted kitchens and bathroom appliances are included in the determination of the chargeable consideration – see LBTT2002. Items not included in the chargeable consideration are outlined in LBTT2009.
Land in Scotland does not include land below the low water mark. It does however include jetties and similar structures with one end attached to land in Scotland. It also includes land under water above the low water mark, for example lochs and rivers.
LBTT(S)A 2013 sections 3 and 4
Exempt interests are interests that are not chargeable to LBTT. They include a security interest, such as a standard security. A standard security is held for the purpose of securing a monetary payment or performance of any other obligation.
Subject to certain rules (see LBTT3017), an interest held by a financial institution either on its own or jointly with someone in connection with an alternative property finance arrangement is an exempt interest.