Draft Scottish Order corrects unintended consequence of treating couples as a single economic unit when charging additional dwelling supplement.
The ‘additional dwelling supplement’ (ADS) applies to the purchase of additional Scottish dwellings by individuals and Scottish dwellings by companies. It tops up the standard amount of Scottish Land and Buildings Transaction Tax (LBTT) payable. Equivalent rules apply for SDLT in the rest of the UK. Relief from ADS is available if the purchase is the replacement of a main residence. Currently, spouses, civil partners and cohabitants are treated for ADS purposes as a single purchaser when one acquires their main residence but not when determining if both have replaced their previous main residence. A draft order, The Land and Buildings Transaction Tax (Additional Amount-Second Homes Main Residence Relief) (Scotland) Order 2017, has been published to address this error for transactions with an effective date on or after 30 June 2017. It will merely make the ADS rules work in the same way as the SDLT rules already work.
A copy of the draft order can be found here. If you have any questions on how these rules work in Scotland or the rest of the UK please speak to your usual KPMG contact.
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