Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 18 paragraph 4

Acquisition of a beneficiary's interest treated as acquisition of trust property

Schedule 18 paragraph 4 establishes that when someone acquires the interest of a beneficiary under a trust, that acquisition is treated for LBTT purposes as an acquisition of an interest in the underlying trust property itself.

• When a person acquires a beneficiary's interest in a trust, LBTT treats this as acquiring an interest in the actual trust property (e.g. land or buildings held by the trust).
• This means the transaction is brought within the scope of LBTT even though what is technically changing hands is a beneficial interest rather than the property directly.
• The rule prevents avoidance of LBTT by structuring a transfer of land or buildings as a transfer of a trust interest rather than a direct property transaction.
• The practical effect is that the acquirer of the beneficiary's interest must consider whether LBTT is due, just as if they were acquiring the underlying land or buildings themselves.