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Land and Buildings Transaction Tax (Scotland) Act 2013

Schedule 5 – Multiple Dwellings Relief

197.This schedule, introduced by section 27, provides relief from LBTT in relation to purchases of multiple dwellings to ensure that the single transaction involving a number of dwellings is not taxed at a high tax band when it involves dwellings that, individually, may each involve a consideration only falling within lower bands.

198.The relief applies in respect of single transactions (other than a transaction to which schedule 19 (leases) applies) involving multiple dwellings and multiple linked transactions (other than a transaction to which schedule 19 (leases) applies) which, taken together, involve multiple dwellings.

199.The calculation of the relief is set out in Part 4. Paragraph 10 sets out the formula for calculating the amount of tax chargeable in relation to a relevant transaction (DT × ND) + RT. Paragraphs 13 and 14 set out how to calculate DT (tax due in relation to a dwelling) and RT (tax due in relation to remaining property) respectively. ND is the number of dwellings that are, or are part of, the main subject-matter of the transaction. This involves calculating an average price per dwelling and then calculating the tax that would be paid on such a price. The tax due on the average price per dwelling is then multiplied by the number of dwellings covered by the transaction to produce the amount of tax due in respect of the dwellings. To that figure is added any tax payable in respect of property other than dwellings. The result is the tax payable in respect of the transaction.

200.It is possible that a number of dwellings bought in a single transaction may have an average price that falls in the nil rate tax band, in which case 100 per cent relief would be provided and no tax would be due. Paragraph 11 provides that where the relief, as calculated under paragraph 10, would result in the tax chargeable in relation to the transaction being less than “the minimum prescribed amount” then the tax chargeable will be the minimum prescribed amount. Therefore, in order to determine whether tax chargeable in the land transaction is at least the minimum prescribed amount, it is necessary to calculate the tax that would be due in the absence of the relief.

201.Paragraph 12 enables the Scottish Ministers to prescribe by order, subject to the negative procedure (see section 68), “the minimum prescribed amount”.

202.Part 5 deals with the withdrawal of the relief. See also section 33 which requires there to be a further return to the Tax Authority where relief is withdrawn.

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