Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 17 paragraph 18

Qualifying events after transfer of land to a partnership

Paragraph 18 of Schedule 17 deals with the tax consequences when, within three years of land being transferred to a partnership, the person who transferred the land withdraws money or has a loan repaid by the partnership.

• If, within three years of land being transferred to a partnership, the person who transferred it withdraws capital, reduces their partnership interest, ceases to be a partner, or has a loan repaid, this is a "qualifying event" that triggers an LBTT charge.
• The qualifying event is treated as a chargeable land transaction with the partners as the buyers, and the partnership responsibility rules apply for reporting and payment obligations.
• The chargeable consideration is based on the value withdrawn or loan repaid, but is capped at the market value of the land at the date of the original transfer, reduced by any amount previously charged to tax.
• Any LBTT payable under this provision is reduced (but not below nil) by any LBTT already payable under paragraph 32 (which deals with transfers of interests in property investment partnerships) in respect of the same event.

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