Scotland: Three-year review of Land and Buildings Transaction Tax (LBTT) Leases

This is a reminder that the LBTT legislation places an obligation on tenants in a lease that has been subject to an LBTT return to submit a further LBTT return following every third anniversary of the effective date of the lease. As LBTT took effect from 1 April 2015, the first possible applicable review date was 1 April 2018.

The purpose of the LBTT return in respect of the three-year review period is to inform Revenue Scotland of any changes that have occurred since the last LBTT return was submitted, and to enable a review of the amount of LBTT chargeable over the lifetime of the lease. It is therefore possible for the submission of a three-yearly review LBTT return to generate a tax liability or a refund.

The LBTT legislation also requires the submission of LBTT returns:

  • On assignation of the lease;
  • On termination of the lease.

Revenue Scotland have sent out reminder letters to tenants (but not advisers) that they believe are affected. It may therefore be worth checking that your clients who are tenants are aware of their obligations. Further information about LBTT lease review returns, including the submission of returns, is available on the Revenue Scotland website.


Posted in: News