Land and Buildings Transaction Tax (Scotland) Act 2013 section 21

Annuities etc.: chargeable consideration limited to 12 years' payments

Section 21 limits the amount of chargeable consideration that needs to be taken into account for LBTT purposes when part or all of the price for a land transaction is paid as an annuity or other periodic payment over a long or indefinite period.

• Where consideration for a land transaction takes the form of an annuity or periodic payment (other than rent) payable for life, in perpetuity, for an indefinite period, or for more than 12 years, only 12 years' worth of annual payments count as chargeable consideration for LBTT.
• If the annual amount varies or may vary, the 12 highest annual payments are used in the calculation, and any adjustments linked to the retail prices index, consumer prices index, or similar inflation indices are ignored when determining those amounts.
• Where the payment amounts are contingent or uncertain, they are determined using the rules for contingent consideration or uncertain and unascertained consideration, but once this section applies, there is no subsequent adjustment when a contingency is resolved or the actual amount becomes known.
• When this section applies, the taxpayer cannot use the deferral mechanism that would otherwise allow payment of LBTT to be postponed pending the resolution of contingent or uncertain consideration.