Market leading insight for tax experts
View online issue

Retrospective effect for LBTT group relief amendment

printer Mail

The Scottish government has confirmed it will bring forward further legislation to give retrospective effect to amendments which extend land and buildings transaction tax (LBTT) group relief to certain transactions which had been left outside the scope of the relief.

Revenue Scotland acknowledged in a technical bulletin in August 2017 that the wording of the LBTT primary legislation had inadvertently failed to provide for group relief to cover transactions where companies transfer ownership of property within a group using shares as financial security.

The Scottish government responded to concerns by consulting on secondary legislation to remedy the position. The draft Land and Buildings Transaction Tax (Group Relief Modification) (Scotland) Order 2018, published in May, extends relief to these transactions on or after 30 June.

Scottish finance secretary, Derek Mackay, has confirmed to the Parliament’s finance and constitution committee his intention to introduce further legislation making the change retrospective to the introduction of LBTT in 2015.

The CIOT welcomed the announcement, commenting that transactions of this nature are common in commercial arrangements.

‘Most companies with bank lending facilities will have a share pledge in place, while strong anti-avoidance measures are contained in LBTT legislation to protect against tax avoidance and evasion,’ said Moira Kelly, chair of the CIOT’s Scottish technical committee.

Issue: 1404
Categories: News