ADS return, payment and amendments

This guidance covers information on the ADS return, payment and amendments.

Contents

LBTT10050 - Paying the ADS and making an LBTT return

If a transaction is notifiable for LBTT, a return must be made to Revenue Scotland. This must be within 30 days of the effective date. The buyer must calculate and pay any LBTT due at the same time as submitting the return. When the ADS applies, you will include details of this in the LBTT return and make payment for the ADS alongside any payment due for LBTT.

Note: Where the sale of the previous main residence occurs after the effective date of the purchase of the buyer’s next main residence, but before an LBTT return has been made the ADS does not require to be paid. If the ADS has been paid and is no longer due you should follow the guidance at: LBTT10070 Amendments to return and repayment claims for the ADS. 

For further guidance see:

https://revenue.scot/taxes/land-buildings-transaction-tax/lbtt-legislation-guidance/additional-dwelling-supplement-ads-technical/ads-return-payment-amendments#LBTT10070

Draft LBTT returns

Please consult our guidance on draft returns, if you have started a draft tax return prior to 16 December 2022, where the effective date is on or after 16 December 2022.

LBTT10070 Amendments to returns and repayment claims for the ADS

Repayment of the ADS

Where the ADS has been paid and the buyer has been able to dispose of their previous main residence within an 18 month period for transactions with an effective date up to including 31 March 2024 or a 36 month period for transactions with an effective date on or after 1 April 2024, beginning with the day after the effective date of the next main residence purchase transaction, the buyer (or their solicitor acting on their behalf) may claim a repayment of the ADS paid.

In any scenario where, after the end of the day that is the effective date for the next main residence purchase transaction;

For transactions with an effective date up to and including 31 March 2024

a) the buyer sells a dwelling which was their main residence at any time during the 18 month period ending with the day that is the effective date of the next main residence purchase transaction, and

b) the sale of that previous main residence is within a period of 18 months beginning with the day after the day that is the effective date of the next main residence purchase transaction, and

c) the next main residence has been occupied as the buyer's only or main residence, then a repayment of the ADS may be claimed.

For transactions with an effective date on or after 1 April 2024

a) the buyer or any one buyer if joint buyers sell a previous main residence within a period of 36 months beginning with or ending with the day after the day that is the effective date of the next main residence purchase transaction, 

and

b) that dwelling was the buyers or if joint buyers one of the buyers main residence at any time during the 36 months ending with the day after the day that is the effective date of the next main residence purchase transaction 

and

c) the next main residence has been occupied by all the buyers as their only or main residence

then a repayment of the ADS may be claimed subject to:

d) where there are two or more buyers who are or will be jointly entitled to the interest acquired, each of whom own a dwelling or dwellings other than the subject-matter of the transaction, all of the buyers must meet the conditions.

This additional condition means for joint buyers where a further property is owned by the second or subsequent buyer a repayment of the ADS is not applicable where they have not themselves replaced a previous main residence.

Where a previous main residence is sold after the period of 18 months (effective dates up to 31 March 2024) or 36 months (effective dates on or after 1 April 2024), beginning the day after the day that is the effective date of the next main residence purchase transaction, no repayment may be claimed.

Note: In cases where repayment conditions are not met.

Revenue Scotland is unable to consider any exceptional circumstances.

A repayment can be claimed by either:

  • amending the original LBTT return for the transaction if within the statutory 12 month amendment period set by section 83(2) of the RSTPA 2014 or,
  • where the statutory amendment period has ended by making a claim for repayment of an overpayment of tax to us under section 107 of the RSTPA 2014 within 5 years of the tax return due date.

For more information and claim forms please see: How to claim a repayment of Additional Dwelling Supplement

For further guidance see:

Revenue Scotland and Tax Powers Act 2014, section 114 to 117 inclusive & schedule 3

Examples

Repayment of the ADS where PMR sold within 18 months

Blue is selling their PMR (House 1) and purchasing their NMR (House 2). However, due to mortgage complications, the sale of their PMR is delayed. The purchase of House 2 goes ahead on the intended date. At the end of the effective date, Blue owns two dwellings and has not replaced their PMR. The ADS will apply.

In February 2021, Blue manages to sell their PMR (House 1). As this has taken place within the 18 month period beginning the day after the effective date for House 2, Blue will be able to claim a repayment of the ADS paid in June 2020.

Reclaiming ADS after sale of PMR within 18 months

In June, Purple and Pink purchase an additional dwelling, which they intend to live in as their main residence. They have not sold their PMR (House 1). Purple and Pink own more than one dwelling and have not replaced their MR, so the ADS will apply.

Six months later, Purple and Pink sell their PMR. As they are disposing of a PMR within 18 months, starting the day after the effective date, they are eligible for a repayment of the ADS paid in June.

No repayment due after sale of buy to let as not PMR

Purple and Pink own a buy to let dwelling, but currently live in rented accommodation. They jointly buy House 2, which they intend to live in as their new main residence. They have not sold the buy-to-let. Purple and Pink own more than one dwelling and have not replaced their MR, so the ADS will apply.

Six months later, Purple and Pink sell their buy-to-let property. They are disposing of a property they own, but it is not one which they used as their previous main residence at any time in the last 18 months, so they are not eligible for a repayment of the ADS paid in June. If they had used the buy-to-let as their main residence at any time during that 18 month period, they could have received the repayment.

ADS repayment - NMR sold within 18 months

Blue is selling their PMR (House 1) and purchasing their NMR (House 2). However, due to mortgage complications, the sale of their PMR is delayed. The purchase of House 2 goes ahead on the intended date. At the end of the effective date, Blue owns two dwellings and has not replaced their PMR. The ADS will apply. Despite recently buying House 2, due to personal circumstances, Blue sells House 2. This has taken place within the 18 month period beginning the day after the effective date for House 2, but it is a house other than that which formed part of the subject-matter of the chargeable transaction that needs to be sold for the ADS repayment conditions to apply. Blue will not be able to claim a repayment of the ADS previously paid

Co-habitants - one owned PMR, both purchase NMR

Red and Green live together in their main residence (House 1), solely owned by Red. They are cohabitants. In July, they decide to jointly purchase a property (House 2) which will replace their PMR. However, the sale does not go through on time and at the end of the effective date, Red will own two dwellings (and Green will be deemed to own two dwellings). The ADS will apply as they own more than one dwelling and have not replaced their PMR. Six months later, the PMR sells. A repayment of the ADS can be claimed as one of the buyers has replaced a dwelling that they owned within an 18 month period, both buyers lived in that PMR as their main residence and both intend to live in the NMR as their only or main residence.

Civil partners - both buyers did not live in PMR sold

Purple owns their current main residence (House 1), but will soon be buying a NMR with their civil partner, Blue. Blue currently lives in separate rented accommodation. Purple cannot sell their MR before the joint purchase takes place in August. Therefore, at the end of the effective date of the transaction, Purple owns two dwellings and has not replaced their PMR. Therefore, the ADS will apply. Blue is also deemed to own two dwellings by virtue of the economic unit provisions. Purple sells their PMR five months later and they now wish to claim a repayment of the ADS paid. Although a PMR has been replaced, both buyers did not occupy House 1 as their PMR, so the repayment conditions have not been met and a repayment cannot be claimed.

COVID-19

For transactions with an effective date between 24 September 2018 and 24 March 2020, the 18 month period has been extended to 36 months to dispose of a previous main residence from the date of the effective transaction.

For further guidance see:

 

 

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