Extension to the ADS reclaim period

This week, the Scottish Parliament passed the Coronavirus (No 2) (Scotland) Bill, a further legislative instrument dealing with the impacts of coronavirus on our society and economy.

The Bill contains a change to the Additional Dwelling Supplement (ADS) which addresses the difficulties faced by homeowners who bought a new home before selling their old home and as a result have paid the 4% ADS. In the current climate, some homeowners are struggling to meet the previous 18-month deadline for selling their former home so that ADS can be reclaimed.

Part 4 of Schedule 4 of the Bill provides for:

• an extension to the time period for selling the former home so that ADS can be reclaimed from 18 months to 36 months; where
• the "effective date" of the purchase of the new house, normally when the purchase was completed, was between 24 September 2018 and 24 March 2020.

The Bill also gives the Scottish Government the power to extend, by secondary legislation, the 36-month period or to change the dates of the purchases to which it applies, if that is necessary for a reason relating to coronavirus. 

The Bill initially provided for an extended period of 27 months and this was amended during the stage 2 passage of the Bill to 36 months. The extension of the 18-month period to 36 months is a welcome move by the Scottish Government which recognises the current challenges in the property market and will help many homeowners. We proposed this legislative change to the Scottish Government in March when the likely impacts of Coronavirus on the property market began to emerge.

COVID-19 related changes to Revenue Scotland operations

Revenue Scotland have made some operational changes due to COVID-19. You can keep up to date with operations on their COVID-19 page.

Revenue Scotland’s telephone Support Desk is currently unavailable. If you or your clients have a query, you should use the secure messaging system in the Scottish Electronic Tax System (SETS), the online LBTT return system, or if you are unable to get access to SETS, you can email LBTT@revenue.scot for LBTT enquiries, or SLfT@revenue.scot for queries relating to Scottish Landfill Tax.

LBTT returns and payments

All LBTT returns (conveyance, lease, or lease review) made to Revenue Scotland from 1 May must be submitted online using SETS. Paper forms submitted by post can no longer be accepted.

Revenue Scotland are no longer in a position to accept payments made by cheque. Payments must be made by BACS, or where available, Direct Debit.

ADS repayment claims

ADS repayment claims can now only be made online and paper claims will no longer be accepted.

Agents who submitted the original LBTT return and who are claiming within 12 months of the purchase, should claim the repayment by amending the LBTT return through SETS.

In other cases, agents should use the new online ADS Repayment Claim Form which should be emailed to lbtt@revenue.scot.

Taxpayers can claim using the new online repayment claim form and e-mailing it to lbtt@revenue.scot.

You can access the new online form on the Revenue Scotland website.