LBTT4011 - Non-residential or ‘mixed’ land and property rates and bands

LBTT guidance on the tax rates and bands which apply to non-residential property transactions.

For non-residential property transactions (see LBTT4012 for what constitutes non-residential property), the rate of tax is determined by reference to percentages of the chargeable consideration (see LBTT2001) for the transaction falling within the bands below.

LBTT(S)A 2013 section 24

Anything of economic value which is given in exchange for land or property counts towards the chargeable consideration. If the seller has opted to tax, so that VAT is chargeable on the price, LBTT is payable on the price including VAT.

LBTT(S)A 2013 schedule 2

Non-residential rates and bands for transactions on or after 25 January 2019

Purchase price LBTT rate
Up to £150,000 0%
Above £150,000 to £250,000 1%
Above £250,000 5%

If the value is above the payment threshold, LBTT is charged at the appropriate rate on the amount of the chargeable consideration within that band. For example, an office bought for £465,000 is charged at:

0% for the first £150,000;

1% for the next £100,000;

5% for the remaining £215,000;

So, £11,750 must be paid in LBTT

LBTT(S)A 2013 section 25

Transitional Provision 

Please note that where the effective date of a land transaction is on or after 25 January 2019 and the contract for the land transaction was entered into prior to 12 December 2018, the tax rates and bands for non-residential transactions that were in force prior to 25 January 2019 will apply.

Transitional Provision Example

SK Design Limited is acquiring new commercial premises for £250,000. Missives concluded on 05 December 2018 and the effective date of the transaction is 01 February 2019.

Although the transaction completed after 25 January 2019, the non-residential rates and bands prior to 25 January 2019 will apply as the contract was entered into prior to 12 December 2018.

Therefore, SK Design Limited will be due £3,000 of LBTT.

0% for the first £150,000;

3% for the next £100,000;

So £3,000 must be paid in LBTT.

How to complete a tax return when transitional provisions apply

When completing the tax return, the calculation is based on the effective date of the transaction. Any transaction with an effective date on or after 25 January 2019 will result in non-residential rates and bands for transactions on or after 25 January 2019 being charged.

Where the contract for the transaction has been entered into prior to 12 December 2018, but the effective date is after 25 January 2019, non-residential rates prior to 25 January 2019 will apply. In order to show this on the LBTT tax return, you must overwrite the amount of tax due in the ‘Total amount of tax due for this transaction’ box on the return.

You must also ensure you complete the ‘date of contract or conclusion of missives’ box at the beginning of the return. This will allow Revenue Scotland to see the contract was entered into prior to 12 December 2018.

Example:

SK Design Limited has acquired new commercial premises for £250,000. The contract was entered into on 05 December 2018. However, the effective date was 01 February 2019. As the contract was entered into prior to 12 December 2018, the non-residential rates and bands prior to 25 January 2019 will apply.

When the agent for SK Design Limited completes the LBTT tax return, 05 December 2018 should be entered into the ‘Date of contract or conclusion of missives’ box on page 1 of the return:

When the agent for SK Design Limited reaches page 6 of the return, they select ‘calculate’ to calculate the tax due. As the effective date is after 25 January 2019, the SETS system calculates tax due using the new rates and bands for non-residential transactions on or after 25 January 2019.

In order to ensure LBTT is calculated and paid at non-residential rates prior to 25 January 2019, the agent for SK Design Limited will have to manually overwrite the amount of tax due in the ‘LBTT less reliefs (Excluding ADS)’ field.

After overwriting the LBTT figure to the correct amount, the ‘Total amount of tax due for this transaction’ field is updated to reflect the correct amount of LBTT due.

Non-residential rates and bands for transactions prior to 25 January 2019

The Land and Buildings Transaction Tax (Tax Rates and Tax Bands) (Scotland) Order 2015

Purchase price LBTT rate
Up to £150,000 0%
Above £150,000 to £350,000 3%
Above £350,000 4.5%

If the purchase price is above the nil rate tax band, LBTT is charged at the appropriate rate on the amount of the chargeable consideration within the relevant bands.

For example, an office bought for £465,000 is charged at:

0% for the first £150,000; 

3% for the next £200,000;

4.5% for the remaining £115,000;

So £11,175 must be paid in LBTT.

LBTT(S)A 2013 section 25

We have developed an online tax calculator on our website for help in working out the amount of LBTT payable on non-residential transactions. This calculator is for reference purposes only.

Ref ID: 
LBTT4011
Archive Date: 
25 January 2019
Last updated: 
25 January 2019

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