The CIOT has responded to the Scottish government’s consultation on draft legislation to revise the additional dwelling supplement (ADS) rules – principally to extend key timelines, disregard certain inherited properties and certain small shares in property, and deal with joint buyer situations. The changes will be introduced by the Land and Buildings Transaction Tax (Miscellaneous Amendments) (Scotland) Order 2024 which is currently available in draft.
Relief from ADS for buyers with inherited properties is limited to properties inherited between conclusion of missives and the effective date of the purchase of a new residence. ‘This window could be very small to the point of being impractical to utilise’, suggests the CIOT, proposing instead a three-year grace period.
A previously suggested discretionary power for Revenue Scotland and the courts to waive ADS in exceptional circumstances is not included in the draft legislation. The CIOT notes that the equivalent discretion available to HMRC in relation to SDLT appears not to have caused uncertainty or operational difficulties (raised as concerns by the Scottish government in a previous consultation response). The CIOT also notes the approach in Wales, where the Welsh government is consulting on the introduction of discretion which would only be available in prescribed circumstances.
Extending the relevant purchase/sale deadlines from 18 to 36 months, the £40,000 small shares threshold and provisions for separating couples and joint buyers are all broadly in line with expectations following previous consultations, says the CIOT.
The CIOT has responded to the Scottish government’s consultation on draft legislation to revise the additional dwelling supplement (ADS) rules – principally to extend key timelines, disregard certain inherited properties and certain small shares in property, and deal with joint buyer situations. The changes will be introduced by the Land and Buildings Transaction Tax (Miscellaneous Amendments) (Scotland) Order 2024 which is currently available in draft.
Relief from ADS for buyers with inherited properties is limited to properties inherited between conclusion of missives and the effective date of the purchase of a new residence. ‘This window could be very small to the point of being impractical to utilise’, suggests the CIOT, proposing instead a three-year grace period.
A previously suggested discretionary power for Revenue Scotland and the courts to waive ADS in exceptional circumstances is not included in the draft legislation. The CIOT notes that the equivalent discretion available to HMRC in relation to SDLT appears not to have caused uncertainty or operational difficulties (raised as concerns by the Scottish government in a previous consultation response). The CIOT also notes the approach in Wales, where the Welsh government is consulting on the introduction of discretion which would only be available in prescribed circumstances.
Extending the relevant purchase/sale deadlines from 18 to 36 months, the £40,000 small shares threshold and provisions for separating couples and joint buyers are all broadly in line with expectations following previous consultations, says the CIOT.
