What happens when LBTT relief is only partially withdrawn under Schedule 13 paragraph 9?

When LBTT relief is only partially withdrawn, paragraph 9 of Schedule 13 provides that the tax charge is an appropriate proportion of the full tax that would have been payable had no relief been available. The buyer does not face the entire original liability — only the share corresponding to the extent of withdrawal.

How is the proportionate tax calculated on partial withdrawal of LBTT relief?

The starting point is the full amount of tax that would have been payable if relief had never been claimed. An appropriate fraction of that full charge then becomes due, scaled to match the proportion of the transaction to which the relief no longer applies. The remaining portion of the relief continues unaffected.

Can you give an example of partial LBTT relief withdrawal under paragraph 9?

If a company acquires land for £1,000,000 claiming relief that reduces the LBTT charge to nil (full tax being £40,000), and relief is later withdrawn for 25% of the subjects, paragraph 9 means tax due is 25% of £40,000, equalling £10,000. The remaining 75% relief continues to apply.

Why does the LBTT legislation use a proportionality rule for partial relief withdrawal?

The proportionality rule ensures fairness by scaling the tax charge to reflect the degree to which relief conditions have ceased to be met. Rather than imposing the full tax liability on a buyer who has only partly fallen out of the conditions for relief, the legislation limits the charge to the proportion that no longer qualifies.

Land and Buildings Transaction Tax (Scotland) Act 2013 section Sch 13 para 9

Where relief is partially withdrawn, the amount of tax chargeable

Schedule 13 paragraph 9 establishes how the tax charge is calculated when a previously granted relief is only partially withdrawn rather than withdrawn in full.

Where a relief from LBTT is partially withdrawn, a proportionate tax charge arises.
The tax due is calculated as an appropriate proportion of the full tax that would have been payable had no relief been available.
This means the buyer does not necessarily face the entire original tax liability — only the share that corresponds to the extent of the withdrawal.
The provision ensures that tax consequences are scaled fairly to reflect the degree to which relief conditions have ceased to be met.

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