Land & Buildings Transaction Tax (LBTT) – Tenants Take Note!

On 1 April 2015 Land & Buildings Transaction Tax (‘LBTT’) replaced Stamp Duty Land Tax (‘SDLT’) in Scotland.  A major difference between LBTT and SDLT is that under LBTT tenants of commercial leases need to submit subsequent LBTT returns to Revenue Scotland every third anniversary of the lease.  This means that the first three-yearly returns for leases will come into effect from 1 April 2018.

There is a simple rationale behind these three-yearly returns: in many cases commercial leases last long periods of time and their terms, such as rent payable can be subject to periodic review or may be turnover or index- linked.  Increase in rents will increase the LBTT payable and this must be paid when the three-yearly return is submitted.  In some cases tenants may find that LBTT has been overpaid and following their three-yearly return a repayment will be issued by Revenue Scotland.

Find out more here.