What does Schedule 14 paragraph 1 of the Land and Buildings Transaction Tax (Scotland) Act 2013 provide?

Schedule 14 paragraph 1 provides that a local authority acquiring a chargeable interest in land or buildings in Scotland may be exempt from Land and Buildings Transaction Tax (LBTT). The exemption is not automatic and only applies where a qualifying condition, defined elsewhere in Schedule 14, is satisfied.

Is the LBTT local authority exemption automatic for all property acquisitions?

No, the LBTT local authority exemption is not automatic. A qualifying condition must be met for the exemption to apply. If the qualifying condition is not satisfied, the local authority is liable for LBTT in the normal way and must submit a return and pay any tax due on the transaction.

What is a chargeable interest for the purposes of this LBTT exemption?

A chargeable interest broadly means any ownership right or other interest in land or buildings in Scotland that would normally attract LBTT on acquisition. This includes purchases of property and acquisitions of rights over land. Where the exemption applies, no LBTT is due on such an interest.

What happens if a local authority does not meet the qualifying condition for LBTT exemption?

If the qualifying condition is not met, the local authority must pay LBTT in the usual way. For example, a local authority purchasing an office building for £2 million without meeting the condition must submit an LBTT return and pay tax calculated at the applicable rates on the purchase price.

Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 14 paragraph 1

Local authority exemption from charge

Schedule 14 paragraph 1 provides that a local authority acquiring a chargeable interest is exempt from LBTT where the qualifying condition is satisfied.

Local authorities can be exempt from LBTT when they acquire a chargeable interest in land or buildings in Scotland.
The exemption is not automatic — a qualifying condition must be met for the exemption to apply.
A chargeable interest broadly means any interest in land or buildings that would normally attract LBTT on acquisition.
If the qualifying condition is not met, the local authority will be liable for LBTT in the normal way.

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