Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 7 para 6

Restrictions on treating the agreement as a taxable event

Schedule 7 paragraph 6 restricts how the agreement between the original buyer (B) and the new buyer (C), referred to in paragraph 2(c), is treated for LBTT purposes, ensuring it does not trigger a tax charge on its own.

• The agreement between B and C (paragraph 2(c)) cannot be treated as substantially performed until the third transaction — the transfer from the seller (A) to the new buyer (C) — actually takes place.
• The normal rules on substantial performance under section 14 (such as taking possession or paying a substantial amount of the consideration) do not apply to this agreement in isolation.
• The agreement between B and C is also not to be treated as a separate land transaction under the options and rights of pre-emption rules in section 12.
• The overall effect is that LBTT is only triggered when the final transfer to C is completed, preventing a double charge arising from the intermediate agreement.