Land and Buildings Transaction Tax (Scotland) Act 2013 section 18

Lease renewals: surrender and re-grant between the same parties

Section 18 of Schedule 19 deals with the LBTT treatment where an existing lease is surrendered (renounced) and a new lease is granted between the same landlord and tenant.

• Where a new lease is granted in return for the tenant giving up (renouncing) an existing lease between the same parties, special rules apply to prevent double taxation.
• The grant of the new lease is not treated as chargeable consideration for the renunciation of the old lease.
• Equally, the renunciation of the old lease is not treated as chargeable consideration for the grant of the new lease.
• The general exchange rules (Schedule 2, paragraph 5) do not apply in these circumstances, so the transaction is not treated as a property exchange.