Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 19 paragraph 16

Assignation of a lease – assumption of obligations

Paragraph 16 of Schedule 19 provides that when a lease is assigned, the new tenant's assumption of the existing obligations under the lease is not treated as chargeable consideration for LBTT purposes.

• When a lease is assigned, the incoming tenant (assignee) takes over the outgoing tenant's obligations under the lease.
• The assignee's assumption of the obligation to pay rent to the landlord does not count as chargeable consideration for the assignation.
• Equally, the assignee's assumption of any other tenant obligations under the lease (such as repair, insurance or maintenance covenants) does not count as chargeable consideration.
• This means that the mere taking on of standard lease obligations by the new tenant does not, by itself, give rise to an LBTT charge on the assignation.