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Scotland Act 2012

Section 28: Scottish tax on transactions involving interests in land

145.This section is one of a series which together provide the mechanism for bringing to an end the collection and management of stamp duty land tax (“SDLT”) in Scotland and allowing the Scottish Parliament to bring in its own land transaction tax.

  • Section 23 indicates that the Scottish Parliament has the power (conferred by section 28 of the 1998 Act) to legislate for their own devolved taxes.

  • Section 29 disapplies the United Kingdom SDLT by excluding land transactions in Scotland from the SDLT charge, from a date to be appointed by HM Treasury.

  • Section 28 defines the scope of this devolved tax, broadly a transaction tax applying to acquisitions of interests in land in Scotland.

  • Schedule 4 contains further amendments relating to the disapplication of SDLT to Scotland and provides for the supply of information about land transactions in Scotland to HMRC.

146.SDLT is a transaction tax which applies to acquisitions of a chargeable interest in land. The definition of “chargeable interest” at section 48 of the Finance Act 2003 includes an estate, interest, right or power in or over land in the United Kingdom.

147.The tax is to be fully devolved by excluding acquisitions of interests in land in Scotland from the charge to SDLT and granting a power to the Scottish Parliament to tax those acquisitions. The devolved tax will apply regardless of the residence of any party to the transaction.

148.Section 28 introduces Chapter 3 (sections 80I and 80J) of new Part 4A of the 1998 Act (as inserted by Section 23) which provides for the devolved Scottish tax.

149.New section 80I provides for the devolved Scottish tax. Subsection (1) provides that a tax charged on certain acquisitions relating to land in Scotland is a devolved tax. Subsection (2) makes clear that such a tax may apply regardless of whether or not the transaction is effected by means of a formal document or the residence of the parties to the transaction.

150.New section 80J provides that certain transactions and statutory bodies are not subject to the devolved tax. Subsection (1) excludes transactions to the extent that they relate to land below mean low water mark. Subsection (2) excludes Ministers of the UK and devolved governments and corporate bodies associated with legislative assemblies in the UK.

151.Subsection (2) ensures that the devolved tax cannot apply to a land transaction to which SDLT applies and thereby links commencement of the tax to the disapplication of SDLT in Scotland under section 29.

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