Land and Buildings Transaction Tax (Scotland) Act 2013 section 22

Deemed market value where transaction involves connected company

Section 22 ensures that when a company buys land or buildings from a connected party, or pays for the transaction using shares in a connected company, the chargeable consideration for LBTT purposes cannot be less than the market value of the property.

• Where the buyer is a company and the seller is connected to it, or the consideration includes shares in a company connected to the seller, the chargeable consideration is deemed to be at least the market value of the property at the effective date of the transaction.
• If the transaction involves the grant of a lease, the deemed minimum consideration also includes the rent payable under the lease.
• The normal exemption for transactions with no chargeable consideration does not apply where this section is in force, meaning such transactions cannot escape LBTT simply because no money changes hands.
• This section is subject to exceptions set out in section 23, and any other provisions that may provide exemption or relief from LBTT still apply.