Society welcomes historic tax Bill but says there is more work to be done
The Law Society of Scotland has today, 26 June, welcomed the passing of legislation that will introduce a new tax to replace stamp duty land tax (SDLT) on property transactions in Scotland from April 2015. This is the first tax Bill passed by a Scottish Parliament in over 300 years.
The new Land and Buildings Transaction Tax (LBTT) could result in savings for Scottish taxpayers as the Bill proposes a progressive charge structure; it will not replicate the 'slab' tax thresholds currently utilised in UK wide SDLT legislation, whereby only a small difference in property value can result in a much higher tax charge.
There is a lot in the Bill that is positive, including the fact that it is based on Scots property law which should make the legislation easier to understand and to apply, but the timescale between enactment of the Scotland Act 2012 and the start date for the new tax is very tight. The Society would welcome further clarification on how the tax will apply to partnerships, as well as further consultation on the types of licences which will attract LBTT and the possibility of a targeted relief for forward funding transactions. Furthermore, the Society is aware that there are some aspects of the transitional arrangements for the changeover between the UK and Scottish tax that still need to be addressed.
Isobel d'Inverno, Convener of the Society's Tax Law Committee, said:
"Now that the Bill has passed, there is more need than ever to get the detail right. This will be a challenge in the time we have left but I welcome the commitment by the Scottish Government to continue to work with the Society and other stakeholders to consider further some of the more complex aspects of the legislation. Members of the Society have also been impressed by initial stakeholder meetings with Registers of Scotland in connection with the development of the online collection system for the new tax. User friendly tax return software will be key to the success of the new tax.
"Given that this is the first substantial tax that the Scottish Parliament has legislated for, there is an important role for practitioners drawing on their knowledge and experience of stamp duty land tax, to tell the government what will and will not work. We hope that they will continue to listen and that we can achieve the common aim of producing a tax that is fair and understandable for taxpayers in Scotland."
Notes to editors
The Land and Buildings Transaction Tax (Scotland) Bill was passed by the Scottish Parliament on 25 June 2013. It can be viewed here
The Cabinet Secretary for Finance, Employment and Sustainable Growth, John Swinney, indicated during the stage 3 debate that the setting of tax rates and tax bands is likely to coincide with the budget process in 2014.
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26 June 2013