Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 19 paragraph 15

Tenant obligations not treated as chargeable consideration

Paragraph 15 of Schedule 19 sets out which tenant obligations under a lease are excluded from being treated as chargeable consideration for LBTT purposes, ensuring that routine lease obligations do not increase the tax payable.

• Standard tenant obligations such as repairing, maintaining or insuring the leased premises are not chargeable consideration.
• Service charges, management costs, guarantees of rent, and penal rents for breach of lease obligations are also excluded.
• Any other tenant obligation that would not affect the rent a willing tenant would pay on the open market is similarly excluded.
• Payments made to fulfil these excluded obligations, and the release of such obligations on lease renunciation, are also not chargeable consideration.