Scotland raises LBTT rates for lease transactions
Released 06 February 2020
Scotland’s Minister for Public Finance and the Digital Economy, Kate Forbes MSP, has proposed changes to Land and Buildings Transaction Tax (LBTT) rates and bands for lease transactions.
The proposals introduce a new rate of 2% payable where the net present value (NPV) of the rent payable under the lease is above £2m. The revised rates and bands are:
•up to £150,000 – 0%;
•above £150,000 to £2m – 1%;
•above £2m – 2%.
The revised rates and bands will apply to transactions with an effective date on or after 7 February 2020. However, a transitional provision may apply if the agreement for the lease or missives of let for the land transaction were entered into before 6 February 2020.
In addition, the change to tax rates and bands will not apply to any further returns made in connection with the three-year review, assignation or termination of a lease where the effective date of the original lease return is between 1 April 2015 and 6 February 2020, or where the transitional provisions apply.
Further details on Scottish Budget 2020–21 can be found at https://www.revenue.scot/news/news/minister-public-finance-digital-economy-announces-scottish-budget-2020-21.