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Additional dwelling supplement consultation

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The CIOT has responded to the Scottish government’s call for evidence on the land and buildings transaction tax additional dwelling supplement (ADS). Key points include:

  • Timelines: the current 18-month deadline for sale of the main residence and the requirement to have lived in the old home for 18 months should both be extended to match the equivalent 36-month timelines that already apply in England and Wales, to ensure ADS is refunded in genuine property replacement situations.
  • Inherited property: ADS applies regardless of whether the new property is purchased or inherited. Changes should be made to reflect joint ownership of low-value properties, and the Scottish government should consider a three-year grace period during which inherited properties are ignored for ADS purposes.
  • Divorce/separation: relief from ADS should apply to avoid hardship when couples split up.
  • New cohabitees: the requirement for both parties to have lived in the old residence should be changed, given that joint buyers may well not have cohabited before the new purchase.
  • Other exceptional circumstances: Revenue Scotland should be given discretion to modify the ADS rules where taxpayers are unable to meet the various conditions for reasons beyond their control.
Issue: 1567
Categories: News