As the Scottish Government starts to distinguish itself from the UK regime we start to see interesting differences which means not surprisingly more tax. Under the old Stamp Duty Land Tax system, a back to back transaction which completed on the same day paid only one lot of tax if handled properly.
Under Land and Buildings Transaction Tax (LBTT) there has to be a significant development carried out to the property within five years to qualify and agricultural buildings, mining and engineering works and plant machinery don’t qualify. Clearly any contract to sell land on a back to back basis is going to have to have indemnities for any retrospective charge if the development doesn’t go ahead. The best advice is probably going to be that the acquisition is made in the name of company and the shares in that company are then sold so that the obligation falls on the owner and doesn’t every fall back on the intermediate purchaser.
As ever Johnson Legal are more than happy to help with detailed advice on a case by case basis.