LIMITED COMPANIES TO PAY ADDITIONAL LAND & BUILDINGS TRANSACTION TAX (LBTT) FROM 1 APRIL 2016
Land & Buildings Transaction Tax (“LBTT”) recently replaced Stamp Duty Land Tax in Scotland. The tax is paid on the purchase of both residential and commercial property purchases above the minimum threshold.
In the draft budget, the Deputy First Minister announced a change to the Scottish Government’s tax proposals for 2016/2017 for LBTT. It is believed this will come in to force from 1st April 2016.
The new measures include a new LBTT supplement on purchases of additional residential properties in Scotland (such as buy to let properties and second homes) where the purchase price is over £40,000.
The supplement is called the Additional Dwelling Supplement (ADS) and is an additional tax of 3% of the total purchase price. For our business or commercial clients it is important to realise that the ADS will apply to all purchases of residential properties by companies or other non-natural persons (eg. partnerships) whether or not they already own a residential property.
There will therefore be a real incentive for companies (or other non-natural parties) to complete residential property purchases prior to 31 March 2016.
If you have any queries in connection with the Additional Dwelling Supplement or LBTT please do not hesitate to katrina.ashbolt@macandmac.co.uk
Please note that Macleod & MacCallum do not offer detailed tax advice and you should consult an appropriately qualified accountant for detailed tax planning advice.
