What is 'the relevant period' under Schedule 5 paragraph 21 of the Land and Buildings Transaction Tax (Scotland) Act 2013?

The relevant period is defined as the shorter of two timeframes: three years from the effective date of the transaction, or the period from the effective date until the buyer disposes of the dwelling to a person not connected with the buyer. Whichever ends first determines the relevant period.

When does the relevant period end if the buyer sells to an unconnected person before three years?

If the buyer sells the dwelling to an unconnected party before the three-year mark, the relevant period ends on the date of that disposal. For example, selling after 18 months to an unconnected buyer ends the relevant period at that earlier date rather than continuing for the full three years.

Does disposing of a dwelling to a connected person end the relevant period?

No. A disposal to a connected person does not bring the relevant period to an end. Only a disposal to someone who is not connected with the buyer can shorten the relevant period. If no disposal to an unconnected person occurs, the period runs for the full three years from the effective date.

What happens if the buyer does not dispose of the dwelling within three years?

If the buyer has not disposed of the property to an unconnected party within three years, the relevant period simply ends at the three-year point from the effective date. Any disposal occurring after that three-year window falls outside the relevant period for ADS purposes.

Land and Buildings Transaction Tax (Scotland) Act 2013 section Sch 5 para 21

"The relevant period"

Schedule 5 paragraph 21 defines "the relevant period" used to determine the timeframe within which certain conditions must be met for the ADS provisions to apply.

The relevant period is whichever is the shorter of two possible timeframes.
The first possible timeframe is three years starting from the effective date of the transaction.
The second possible timeframe runs from the effective date of the transaction until the buyer disposes of the dwelling (or dwellings) to a person who is not connected with the buyer.
If the buyer sells the dwelling to an unconnected person before the three-year mark, the relevant period ends at that earlier date.

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