Fri 18 Jan 2019

LBTT on commercial leases - 3 yearly returns reminder

1 April 2018 was the third anniversary of the introduction of land and buildings transaction tax (LBTT) in Scotland. With it comes the mandatory 3 year lease review returns cycle. It applies to non residential properties, so if you paid LBTT rather than SDLT on your lease, you need to be aware of the obligation to make these returns, and for leases which started after 1 April 2015, if you have not already done so, you should check the date when you need to submit the next return. 

Revenue Scotland appear to be issuing some reminders, and if you get one, please don't ignore it. However, from speaking to clients, not everyone is getting reminders, and we understand reminders are only likely to be issued for the first review, not subsequent ones.

The penalties applied for late submissions, even for low sums or where there is no additional duty due, are high (and much higher than SDLT).

So, if you have not done so, you need to ensure you have an audit done of your lease portfolio for any leases starting after 1 April 2015 to ensure you know and diarise when returns are required.

Returns can be accessed through the Revenue Scotland website. If we submitted your original returns we can help you get a spreadsheet downloaded of returns submitted.


This isn't the only time you need to look at doing further LBTT returns throughout the term of the lease and on its termination, but it is a date in all our minds for tenants as the first tranche of 3 yearly rent review returns fall due. Revenue Scotland records apparently were predicting 5000 3 year review returns in 2018. It will be interesting to see what percent of these they actually got and got timeously.

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