A land transaction is notifiable where:
- the consideration is £40,000 or more
Therefore, where the chargeable consideration is less than £40,000, the land transaction is not notifiable and no return is required.
Where the transaction is a linked transaction, the chargeable consideration means the total across all of the linked transactions. If the consideration across the linked transactions is £40,000 or more, all of the linked transactions will be notifiable, each will require a return.
Chargeable consideration includes any amount which would have been chargeable but for a claim for relief. To determine if a land transaction is notifiable you must consider this. The relief is then taken into account when determining what is chargeable in the return.
The transaction will be notifiable regardless of the chargeable consideration where there is a contract providing for conveyance to a third party and the contract has been substantially performed under Section 11(3).
Where the transaction is the acquisition of a chargeable interest other than a major interest in land, the transaction is notifiable only if it exceeds the nil rate tax band applicable to the transaction.
A major interest in land means ownership of land or the tenant’s right over or interest in land subject to a lease.
An example of acquiring a chargeable interest other than a major interest in land may be the acquisition of a servitude/wayleave. A servitude is a burden on land in favour of other land. A wayleave is a contractual agreement between a landowner or landlord and a telecommunications provider.
These will only be notifiable where the chargeable consideration for the transaction exceeds the nil rate band for that transaction. You will therefore have to determine if it is a residential or non-residential transaction to see which band applies.
Guidance on what constitutes chargeable consideration can be found here: LBTT2002 - What is chargeable consideration | Revenue Scotland
A land transaction is not notifiable if it is exempt. Exempt transactions are:
- no chargeable consideration
- acquisitions by the crown
- residential leases and licenses
- transactions in connection with a divorce
- transactions in connection with the dissolution of a civil partnership
- assent and appropriations by personal representatives
- variation of testamentary dispositions
If the interest in question is an exempt interest, namely a security interest such as the creditor’s interest in a standard security, the transaction is beyond the scope of the legislation and is not chargeable to LBTT as it is not a chargeable interest.
For further guidance see: