Land and Buildings Transaction Tax (Scotland) Act 2013 section Schedule 13 paragraph 7

Meaning of "at a premium" and "low-rental" lease

Schedule 13 paragraph 7 defines two key terms used in the LBTT rules for leases: what it means for a lease to be granted "at a premium" and what constitutes a "low-rental" lease.

• A lease is granted "at a premium" when the tenant pays something in addition to rent — for example, a lump sum payment at the start of the lease.
• A lease is a "low-rental" lease if the annual rent is less than £1,000 per year, or if there is no rent at all.
• These definitions are important because they determine how a lease transaction is treated for LBTT purposes, including which rate bands and reliefs may apply.
• Both conditions can apply simultaneously — a lease can be both "at a premium" and "low-rental" at the same time.