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The Scottish Government has published its consultation paper on
the proposed replacement for stamp duty land tax ("SDLT")
in Scotland.
The new tax, which will be known as the Land and Buildings
Transaction Tax, will come into force in April 2015, at which time
SDLT will cease to apply to property transactions in Scotland. It
is the Scottish Government's stated intention to create a
fairer tax that sits more comfortably with Scots property law and
practices. The consultation paper sets out the Scottish
Government's proposals on how the tax would operate and invites
comments and suggestions on key areas including the structure of
the tax. The Scottish Government's preferred structure is a
progressive tax, similar to the structure of UK income tax, which
it views as fairer than SDLT's "slab" approach, where
the applicable rate of tax is charged on the whole price paid, not
just the amount above the relevant threshold.
The consultation paper also invites comments and suggestions on
a number of other areas including:
how the tax may be structured to ensure that the calculation of
tax payments due on commercial leases is better aligned with Scots
property law and practices;
whether the tax must be paid as a pre-requisite to registration
of title;
whether the legislation should include targeted anti-avoidance
measures similar to those in the SDLT legislation;
whether a general anti-avoidance rule should be put in place
instead of, or in addition to, the proposed targeted anti-avoidance
rules;
the reliefs and exemptions that should be available;
the treatment of partnerships and trusts; and
whether the tax should be amended in the future to support key
Scottish Government priorities.
The Scottish Government has confirmed that it will establish a
new tax administration agency for assessing and collecting the Land
and Building Transaction Tax, known as Revenue Scotland. It is
proposed that Revenue Scotland will be established this year and
will work closely with Registers of Scotland to administer the new
tax.
Responses to the consultation should be submitted by Thursday 30
August 2012. The consultation document can downloaded from the
Scottish Government's website
here.
The material contained in this article is of the nature of
general comment only and does not give advice on any particular
matter. Recipients should not act on the basis of the information
in this e-update without taking appropriate professional advice
upon their own particular circumstances.
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