First tenants' LBTT three-yearly returns due soon

It is less than six months before the first LBTT returns will require to be submitted under the three-yearly review cycle provided for under the LBTT (Scotland) Act 2013 (sched 19, para 10). Under these provisions, a tenant under an LBTT lease has to make a return to Revenue Scotland every three years.

The relevant date for submission of these returns is the third anniversary of the effective date of the original transaction, and every subsequent three years. Returns must be made within 30 days of the relevant date.

Although their original intention had been not to contact tenants, Revenue Scotland has now indicated that it is their intention to send out reminders to tenants in advance of the three-year deadline. They will send a reminder three months in advance, followed up with a further reminder. There is an initial penalty of £100 for failing to make the return, and if the tenant continues so to fail, there could be total penalties of around £1,000 after six months even if (as will often be the case) no additional tax is due.

If the tenant at the relevant date is not the original tenant, but an assignee, the submission date is still the third anniversary of the original effective date, not of the date of assignation. An assignee assumes the assignor’s responsibilities in relation to LBTT, and so should have obtained copies of all subsequent LBTT returns at the time of the assignation, as well as the LBTT return that the assignor was required to submit at that time.