The Scottish Government has published its draft Budget for 2020/21. This included some changes to Land and Buildings Transaction Tax and Scottish Income Tax.
Land and Buildings Transaction Tax
The Minister for Public Finance & Digital Economy, Kate Forbes MSP, has proposed changes to Land and Buildings Transaction Tax (LBTT) rates and bands for lease transactions.
The changes take effect from 7 February 2020. The proposals introduce a new rate of 2% payable where the net present value of the rent payable under the lease is above £2 million. This changes the structure from 2 bands to 3 bands.
A transitional provision may apply if the agreement was entered into before 6 February 2020.
It should be noted that the secondary legislation under which the changes will take effect is subject to approval by the Scottish Parliament. If the legislation is not approved, Revenue Scotland will revise the guidance and provide information on how to reclaim any additional tax paid.
Revenue Scotland has updated its online tax system (SETS), tax calculators and guidance to reflect the changes and further details are available on the Revenue Scotland website.
For more information see the Revenue Scotland website:
Scottish Income Tax
The Minister also set out the proposed income tax rates and bands for Scottish income tax for 2020/21. These are subject to agreement by the Scottish Parliament. They assume individuals are in receipt of a UK personal allowance of £12,500.
* Individuals earning more than £100,000 will see their personal allowance reduced by £1 for every £2 over £100,000
For more information see the Scottish government website.