Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 16B paragraph 1

Exemption for heritage property accepted in lieu of tax

Schedule 16B paragraph 1 provides an exemption from LBTT for land transactions involving property that has been accepted by HMRC in satisfaction of a tax liability, and is then transferred to an approved body under the National Heritage Act 1980.

• When a taxpayer cannot pay a tax bill, HMRC may accept property of national heritage importance instead of cash payment under the National Heritage Act 1980.
• Once accepted, HMRC arranges for the property to be transferred to an appropriate public body such as a museum, gallery, library, or similar institution listed in the Act.
• When land or buildings form part of such an acceptance-in-lieu arrangement, the onward transfer to the receiving body is completely exempt from LBTT — no tax is due.
• This exemption ensures that the process of allocating nationally important heritage assets to public collections is not burdened by an additional tax charge on the transaction.