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Law Society welcomes plans for new Scots land tax system

4 December 2012

The Law Society of Scotland has welcomed the proposed introduction of new legislation by the Scottish government to replace Stamp Duty Land Tax from April 2015.

The government intends to bring forward the Land and Buildings Transaction Tax (Scotland) Bill, which will provide for new provisions for a Scottish tax on land transactions.

The Bill is the first of three related bills being proposed under measures enacted in the Scotland Act 2012.

The Society responded to the Scottish Government's consultation earlier this year, and suggested that in relation to leases, the proposed new tax on land and property transactions (LBTT) should be based on rent actually paid rather than using the current method of calculation.

Isobel d'Inverno, convener of the Society's tax law sub-committee said: "As we said when we submitted our response to the consultation, this new tax has the potential to make a real improvement on the current system in Scotland.

“We welcome the simplified drafting of the Bill using Scots law terminology and reflecting Scottish conveyancing practice and we are particularly pleased to see that the Bill replaces the existing "slab and slice" system of payment with progressive rates.

"The accompanying policy memorandum reflects the constructive discussion that we had with the Scottish Government prior to the introduction of the Bill and includes an undertaking to give further consideration to the options we set out for the treatment of non-residential leases, as well as recognition of our concerns about making registration of title subject to receipt of payment.

"The Society's tax law sub-committee is looking forward to considering the Bill in full detail."

Commenting on the Bill, published yesterday, finance secretary John Swinney said:"Today we take a further step toward setting and collecting of taxes in Scotland and doing so better and at less cost than the UK Government.

"In this bill we are setting out an innovative approach to taxation that is much better aligned with Scots law and practices, and the principle of progressive taxation.

"The changes we are proposing would give us the opportunity to better support first time buyers trying to get onto the housing ladder or families buying bigger homes that better suit their needs. Rather than the current distortive ‘slab’ approach which sees people pay too much tax and distorts the market, we will ensure that taxpayers pay an amount more proportionate to the value of their property.”