What does 'control' mean under Schedule 10, paragraph 42 of the Land and Buildings Transaction Tax (Scotland) Act 2013?

Control takes its meaning from sections 450 and 451 of the Corporation Tax Act 2010, subject to a modification in Schedule 11, paragraph 31. In broad terms, a person has control of a company if they hold the greater part of the share capital, voting power, or rights to income or assets on a winding up.

What is a 'relevant associated company' for the purposes of LBTT group relief withdrawal?

A relevant associated company is one that was a member of the same group as the buyer immediately before the buyer left the seller's group, and which itself left the seller's group as a direct consequence of the buyer's departure. This captures subsidiaries or sister companies pulled out when the buyer departs.

Why are the definitions of 'control' and 'relevant associated company' important for LBTT group relief?

These definitions are important because when group relief is withdrawn, the tax consequences can extend beyond the original buyer to its relevant associated companies. Understanding which companies fall within this definition is essential when assessing the potential clawback of relief following a change in group membership.

Can you give an example of a relevant associated company under Schedule 10, paragraph 42?

If Company B (the buyer) is sold to an outside purchaser and leaves Company A's group, Company B's subsidiary Company C also leaves as a direct consequence. Company C qualifies as a relevant associated company because it was in the same group as Company B before departure and left because Company B did so.

Land and Buildings Transaction Tax (Scotland) Act 2013 section Schedule 10, paragraph 42

Definitions used in Part of Schedule 10

Schedule 10, paragraph 42 defines two key terms — "control" and "relevant associated company" — used in this Part of Schedule 10, which deals with the withdrawal of group relief.

"Control" takes its meaning from sections 450 and 451 of the Corporation Tax Act 2010, subject to a modification in Schedule 11, paragraph 31.
A "relevant associated company" is a company that was in the same group as the buyer immediately before the buyer left the seller's group.
To qualify as a relevant associated company, that company must also have left the seller's group as a direct consequence of the buyer leaving.
These definitions are important for determining when group relief may be clawed back following changes in group structure.

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