Land and Buildings Transaction Tax (Scotland) Act 2013 section Schedule 2 paragraph 11

Construction, improvement or repair works as consideration

Schedule 2 paragraph 11 deals with how construction, improvement or repair works forming part of the consideration for a land transaction are treated for LBTT purposes, and sets out the conditions under which such works can be excluded from chargeable consideration.

• Where construction, improvement or repair works form all or part of the consideration for a land transaction, their value may be excluded from chargeable consideration if three conditions are met.
• The three conditions are: the works must be carried out after the effective date of the transaction; they must be carried out on the land being acquired; and it must not be a condition of the transaction that the works are carried out by the seller or a person connected with the seller.
• If any of the three conditions are not met, the open market value of the works must be included as chargeable consideration and will be subject to LBTT.
• Special rules apply where a contract is substantially performed before completion, and separate rules apply where public or educational bodies are involved in the arrangements.