If you live or work in Scotland you may well be interested in the proposals of the Scottish Parliament to replace stamp duty land tax (SDLT) with a simpler land and buildings transaction tax (LBTT) from April 2015.
The power to do this is contained in the Scotland Act 2012.
One of the most significant reforms proposed is a move away from the 'slab' system to a band system similar to that applied in determining income tax. Thus, one alternative (Scenario 1 below) suggested is that the first £180,000 of a residential property transaction is not subject to LBTT but anything in excess of that up to £1.5 million would be subject to a tax at 7.5%. That would mean that the tax on a property worth £300,000 would be 7.5% of (£300,000 – 180,000) ie £9,000. SDLT would be 3% of £300,000, ie also £9,000. Properties sold for more than £300,000 would tend to incur more tax under this scenario. Below £300,000 and the tax would generally be the same or less.
| Scenario 1 | |
| Progressive rate (%) | |
| Below £180,001 | 0 |
| Over £180,000 to £1.5m | 7.5 |
| Over £1.5m | 10 |
Scenario 2 suggested a lower starting point but a lower rate for the first band. Overall this would, as with Scenario 1, be revenue neutral based on historical data, but the distribution of the cost would be slightly different, with purchases under £325,000 paying less than under the current system, but the top 5% of the market would pay more.
| Scenario 2 | |
| Progressive rate (%) | |
| Below £125,000 | 0 |
| Over £125,000 to £250,000 | 2 |
| Above £250,000 | 9.5 |
There are host of other provisions and questions about any need for provisions such as anti-avoidance, which can be found in the consultation at: http://www.scotland.gov.uk/Resource/0039/00394544.pdf.
Please feel free to participate in our survey which can be found at http://freeonlinesurveys.com/v1/rendersurvey.asp?sid=w76km55ex271z4e1041912. However, you are also welcome to contribute by adding your comments below.
Kate Willis
Technical Officer
Wednesday 25 July 2012
