Land and Buildings Transaction Tax (Scotland) Act 2013 section Schedule 17 paragraph 29

Lease transactions involving partnerships where rent is the consideration

Schedule 17, paragraph 29 modifies the standard lease rules in Schedule 19 when a partnership transfer (either into or out of a partnership) involves rent as the whole or part of the chargeable consideration, so that only the relevant chargeable proportion of the rent is taken into account for LBTT purposes.

• When a transfer of land into or out of a partnership involves rent as consideration, the normal lease rules in Schedule 19 are modified so that only the "relevant chargeable proportion" of the rent is used in the LBTT calculations.
• The relevant chargeable proportion is calculated by the formula: SLP (the sum of the lower proportions), which reflects the extent of the ownership change — determined under paragraph 14 for transfers into a partnership, or paragraph 22 for transfers out of a partnership.
• All key steps in the lease tax calculations — including net present value, total net present values, and annual rent figures — are adjusted so that only the relevant chargeable proportion is taxed rather than the full rental amount.
• For transfers out of a partnership that consists wholly of bodies corporate, the rules in this paragraph are subject to additional provisions under paragraph 28.

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