Further LBTT reliefs proposed for property investment funds

Scottish ministers are proposing further reliefs to land and buildings transaction tax, to bring the treatment of certain property investment funds into line with that under stamp duty land tax south of the border.

A consultation has opened on the plans, which specifically relate to relief for the "seeding" (or initial transfer) of property assets into an open ended investment company (OEIC) or co-ownership authorised contractual scheme (CoACS), and a relief for when units in CoACS are traded.

Stakeholders in the property and investment management sectors have approached the Scottish Government to call for these reliefs, suggesting that without changes to the LBTT legislation, investment and pension funds may divest of Scottish properties.

The Scottish Government wishes to gain a better understanding of the future impacts of not having these reliefs, or alternatively, the impacts should they be introduced. This includes understanding the potential for tax avoidance and linkages between these types of financial investment and real economic growth.

Relief from LBTT has previously been introduced for properties held by authorised unit trusts converting or amalgamating with OEIC.

Click here to access the consultation. The deadline for responses is 2 August 2018.