LBTT6015 - Return and payment of tax for review of a lease

LBTT guidance on the rules regarding making a LBTT return and paying tax at the three yearly review of a lease.

The tenant must make an LBTT return to us within 30 days beginning with the day after the review date. The return must be made irrespective of whether there is a change in the tax that is payable. The date the return is required to be made by is the filing date (see LBTT1000).

Note: The review date is the ‘relevant date’ for the purposes of the ‘relevant date’ field in the LBTT return

The LBTT return must include an assessment of the amount of tax chargeable at the review date, calculated using the tax rates and bands that were in force at the effective date of the transaction (such as when the tenant took entry under the missives or agreement for lease, or the lease was granted or substantial performance took place as a result of the payment of rent).

If it is calculated that more tax is payable at the review date (such as where rent reviews or turnover rents turned out to be more than had previously been estimated), payment of the additional tax due must be made at the same time as the LBTT return is made.

Guidance on How to make an LBTT return and pay tax is available separately on our website.

Once the LBTT return has been made, subject to certain restrictions it can be amended up to 12 months after the filing date - see LBTT4006.

If it is calculated that less tax is payable at the review date (for example, because the lease has been varied to reduce the spatial area of the premises subject to the lease and the rent has been reduced accordingly) then a claim for repayment of tax should be submitted in the LBTT return.

LBTT(S)A 2013 schedule 19 paragraph 10

A tenant who fails to make a LBTT return to us by the filing date is liable to a penalty (see RSTP3005). If the return contains an inaccuracy, the tenant may also be liable to a penalty (see RSTP3011).

A tenant who fails to pay tax prior to the expiry of 30 days after the date payment is due (the day the return is made) is liable to a penalty (see RSTP3008). Interest will be charged however on the amount of any unpaid tax from the filing date until the date it is paid (see RSTP4002).

A tenant required to make a LBTT return to us, or who is the tenant in a land transaction which is not notifiable, is also required to keep and preserve certain records. See LBTT9001 for further guidance.

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Archive Date: 
9 March 2015
Last updated: 
9 March 2015
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