Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 19 paragraph 22

Treatment of leases for an indefinite term

Schedule 19 paragraph 22 explains how leases with no fixed end date are treated for LBTT purposes, including how the deemed term increases year by year and when returns must be made.

• A lease with no fixed term is initially treated as a one-year lease, then deemed to extend by one year at a time (two years, three years, and so on) for as long as it continues.
• If the extending deemed term causes the transaction to become notifiable for the first time, the tenant must submit a return within 30 days of the end of that deemed term.
• The return must include a self-assessment of the LBTT due, calculated using the tax rates and bands that were in force at the original effective date of the transaction.
• For the purposes of the notifiable transactions rules in section 30, a lease for an indefinite term is classified as a lease for a term of less than seven years.