Once the LBTT due as a result of a withdrawal of group relief has been determined (see LBTT3026), liability to pay the tax is the responsibility of the buyer.
To enable such a recovery, we must serve notice on the buyer. The notice:
- requires the unpaid amount of tax to be paid within 30 days of the service of the notice;
- must be served before the end of the period of three years beginning with the date on which the tax was finally determined;
- must state the amount of tax to be paid by the person on whom it is served;
- is to be treated as if it were a Revenue Scotland assessment (see RSTP1008) and the tax was due from the person on whom it was served; and
- has effect for recovery of the tax and any interest on the unpaid tax and also for the purposes of appeals.
Where such tax (or any part of it) has not been paid within a period of six months of the date on which it became payable, recovery of the unpaid amount is possible from other persons. LBTT may then be recovered from:
- the seller;
- any company which at any relevant time was a member of the same group as the buyer and was above it in the group structure; or
- any person who at any relevant time was a controlling director of the buyer or of a company having control of the buyer.
When someone other than the buyer has paid the tax (and interest), that person is legally entitled to recover the amount that was paid from the buyer.
No deduction for the amount of LBTT paid as relief withdrawn is allowed in calculating any income, profits or losses for any tax purpose.
For these purposes,
- a ‘relevant time’ means any time between the effective date of the relevant transaction and the date the buyer ceased to be a member of the same group as the seller;
- a company (A Ltd) is above another company (B Ltd) in a group structure if B Ltd (or another company that is above B Ltd in the group structure) is a 75% subsidiary of A Ltd;
- ‘director’ (in relation to a company) has the meaning given by section 67(1) of the Income Tax (Earnings and Pensions) Act 2003 and includes any person falling within section 452(1) of the Corporation Tax Act 2010; and
- ‘controlling director’ (in relation to a company) means a director of the company who has control of the company in accordance with sections 450 and 451 of the Corporation Tax Act 2010.