Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 13 paragraph 6

Disqualifying events for charity relief where exemption is based on charitable use

Schedule 13 paragraph 6 identifies additional events that will disqualify a charity from LBTT relief where the original exemption was granted because the property was to be held or used for charitable purposes.

• This paragraph applies where a charity obtained LBTT relief on the basis that it intended to hold or use the property for charitable purposes (qualifying condition (a)(ii)).
• If the charity subsequently transfers a major interest in all or part of the property for non-charitable purposes, this counts as a disqualifying event and the relief is lost.
• Similarly, if the charity grants a lease at a premium with low rent over all or part of the property, and this is not done for its charitable purposes, this is also a disqualifying event.
• In both cases, the critical test is whether the disposal or lease was made for the charitable purposes of the buyer — if it was not, the charity relief is clawed back.

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