The Land and Buildings Transaction Tax (Additional Amount - Second Homes Main Residence Relief) (Scotland) Order 2017 (the “2017 Order”) amends the ADS rules around family units and replacing main residences.

Before the 2017 Order came into force, ADS was chargeable if spouses, civil partners or cohabitants were jointly buying a home to replace a home that was owned by only one of them. They were liable to pay the ADS due to the fact that only one name was listed on the title deeds.

The 2017 Order introduced to further paragraphs, 8A and 9A, which provide a relief/repayment if the qualifying conditions are met.

Note: For a relief/repayment to apply, the dwelling sold must have been the main residence of both joint buyers at some point during the 18 months prior to the effective date of the purchase of the new dwelling.

Qualifying conditions – relief for spouses, civil partners and cohabitants replacing their main residence

Relief from ADS may be claimed if:

  • there are two buyers who are (in relation to each other) spouses, civil partners or cohabitants;
  • they jointly purchase a new dwelling which they both intend to occupy as their main residence;
  • in the 18 months prior to the purchase of the new dwelling, one of the buyers sold a dwelling; and
  • that dwelling had been occupied by both buyers as their main residence at any point during that same period.

The effect of this relief is that both buyers will be treated as having replaced their main residence.

LBTT(S)A 2013 schedule 2A paragraph 9A

Qualifying conditions – repayment of ADS: spouses, civil partners and cohabitants their replacing main residence

A repayment of ADS may be claimed if:

  • there are two buyers who are (in relation to each other) spouses, civil partners or cohabitants;
  • they jointly purchase a new dwelling which they have both since occupied as their main residence;
  • in the 18 months after the purchase of the new dwelling, one of the buyers sold a dwelling; and
  • that dwelling had been occupied by both buyers as their main residence at any point during the 18 months prior to the purchase of the new dwelling.

The effect of this is that both buyers will be treated as having replaced their main residence and as such can claim a repayment of the ADS.

LBTT(S)A 2013 schedule 2A paragraph 8A

The Land and Buildings Transaction Tax (Relief from Additional Amount) (Scotland) Act 2018 made retrospective the changes introduced by the 2017 Order. This means that eligible transactions where the contract was entered into on or after 28 January 2016 and where the effective date of the transaction is on or after 1 April 2016 will now be able to claim a relief/repayment.

Examples

Example 47A – One spouse owns main residence, joint purchase of new main residence but the transaction does not meet the conditions of the amended legislation

Example 48A - One spouse owns main residence, joint purchase of new main residence

Example 73A – Repayment of ADS already paid on sale of previous main residence solely owned by only one buyer

 

Last updated: 
25 June 2018
CAPTCHA
Security check. Please answer this simple maths problem. E.g. for 1+3, enter 4
8 + 1 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.