What does Schedule 17 paragraph 37 of the Land and Buildings Transaction Tax (Scotland) Act 2013 do?

Paragraph 37 disapplies the normal nil-consideration exemption from certain partnership-related land transactions. This means that even where no cash changes hands, LBTT may still be chargeable on transfers of land into or out of a partnership, and on certain transfers of partnership interests treated as land transactions.

Which partnership transactions are affected by the disapplication of the nil-consideration exemption under paragraph 37?

Three categories are affected: transfers of a chargeable interest into a partnership under Part 4 of Schedule 17, transfers of a chargeable interest out of a partnership under Part 5, and transfers of partnership interests treated as land transactions under paragraphs 17 or 32, covering arrangements involving land and property investment partnerships.

How is LBTT calculated on partnership transactions where no cash changes hands?

Because the nil-consideration exemption is disapplied, the special computational rules in Schedule 17 apply. These typically calculate LBTT by reference to the market value of the property and the relevant partnership share proportions, rather than treating the transaction as exempt simply because no money was paid.

Are any other LBTT reliefs still available for partnership transactions despite paragraph 37?

Yes. Sub-paragraph (2) confirms that other exemptions and reliefs under the LBTT legislation, such as group relief or charities relief, continue to apply to partnership transactions. However, paragraphs 38 and 40 of Schedule 17 may specifically restrict certain reliefs, so advisers should review availability carefully.

Land and Buildings Transaction Tax (Scotland) Act 2013 section Sch 17 para 37

No exemption for nil consideration in partnership transactions

Schedule 17 paragraph 37 removes the normal nil-consideration exemption from certain partnership-related land transactions, while preserving most other reliefs and exemptions.

Normally, a land transaction with no chargeable consideration is exempt from LBTT, but this exemption does not apply to certain partnership transactions covered by Schedule 17.
The transactions affected include those involving transfers of land to a partnership (Part 4), transfers of land from a partnership (Part 5), and transfers of partnership interests that are treated as land transactions under paragraphs 17 or 32.
This means that even where no actual payment changes hands in these partnership transactions, LBTT may still be chargeable — typically calculated by reference to market value or the partnership share attributable to the land.
Other reliefs and exemptions available under the wider LBTT legislation continue to apply to partnership transactions, subject to specific restrictions in paragraphs 38 and 40 of the schedule.

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