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Land and Buildings Transaction Tax (Scotland) Act 2013

Schedule 13 – Charities relief

244.This schedule, introduced by section 27, provides relief from LBTT for charities and charitable trusts. For the purposes of this schedule a charity is defined at paragraph 15(1) as a body registered in the Scottish Charity Register or a body which is established under the law of a relevant territory, managed or controlled mainly or wholly out with Scotland and which meets at least one of the conditions set out in subsection (2). The conditions are: (i) that the body is registered in a register corresponding to the Scottish Charity Register, (ii) the body’s purposes consist only of one or more of the charitable purposes. Sub-paragraph (3) provides that a “relevant territory” is England and Wales, Northern Ireland, a member State of the European Union other than the United Kingdom or a territory specified in regulations made by the Scottish Ministers. Paragraph 16 provides that in this schedule “charitable purposes” has the meaning given in section 106 of the Charities and Trustee Investment (Scotland) Act 2005 (asp 10).

245.Paragraph 1 provides for relief from LBTT if the buyer is a charity, provided that the two conditions in paragraph 2 are met. Firstly, the purchasing charity must intend to hold the land or the greater part of the land for qualifying charitable purposes (within the meaning of section 106 of the Charities and Trustee Investment (Scotland) Act 2005 (paragraph 16)). Secondly, the purchasing charity must not be entering into the land transaction for the purpose of avoiding LBTT.

246.Paragraph 4 provides for charities relief to be withdrawn wholly or partially where a charity claims the relief in relation to a land transaction and, within three years of the transaction, the buyer ceases to be a charity or the land is used otherwise than for qualifying charitable purposes. Relief may also be lost if these events occur more than three years after the transaction but pursuant to arrangements made during the three-year period.

247.The relief is also wholly or partially withdrawn if the buyer transfers a major interest in the whole or part of the subject-matter of the transaction or grants a low rental lease at a premium (paragraph 7). See also section 33 which requires there to be a further return to the Tax Authority where relief is withdrawn. Schedule 13 is modified by paragraph 40 of schedule 17 in the case of partnerships.

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