Land and Buildings Transaction Tax - property investment funds: consultation

Annex A – Draft Legislation

Draft Statutory Instruments

2025 No.

Land and Building Transaction Tax

The Land and Buildings Transaction Tax (Co-ownership Authorised Contractual Schemes) (Scotland) Order 2025

Made - - - - ***

Laid before Parliament ***

Coming into force - - ***

The Scottish Ministers make the following Order in exercise of the powers conferred by section 68(1) and schedule 1 sub-paragraph 8(j) of the Land and Buildings Transaction Tax (Scotland) Act 2013(^[1]) and all other powers enabling them to do so.

In accordance with section 68(2)(^[2]) of that Act, a draft of this instrument has been laid before, and approved by resolution of, the Scottish Parliament.

Citation and commencement

1. This Order may be cited as the Land and Buildings Transaction Tax (Co-ownership Authorised Contractual Schemes) (Scotland) Order 2025 and comes into force on [ ].

2. In this Order, “the Act” means the Land and Buildings Transaction Tax (Scotland) Act 2013.

Transactions in co-ownership authorised contractual schemes to be treated as exempt

3. Schedule 1 of the Act (exempt transactions) is amended as follows.

4. After paragraph 8, insert—

Co-ownership authorised contractual schemes

9.—(1) A transaction within a co-ownership authorised contractual scheme is an exempt transaction if, by virtue of subparagraph (2), no charge to tax would arise in relation to that transaction.

(2) This Act, subject to the provisions in sub-paragraphs (10) and (11), applies in relation to a co-ownership authorised contractual scheme as if—

(a) the scheme were a company, and

(b) the rights of the participants were shares in the company.

(3) “Co-ownership authorised contractual scheme” means a co-ownership scheme which is authorised for the purposes of the Financial Services and Markets Act 2000(^[3]) (the “2000 Act”) by an authorisation order in force under section 261D(1) of that Act.

(4) “Co-ownership scheme” has the meaning given in section 235A of the 2000 Act.

(5) An “umbrella COACS” means a co-ownership authorised contractual scheme—

(a) whose arrangements provide for separate pooling of the contributions of the participants and the profits or income out of which payments are made to them (“pooling arrangements”), and

(b) under which the participants are entitled to exchange rights in one pool for rights in another.

(6) A “sub-scheme”, in relation to an umbrella COACS, means such of the pooling arrangements as relate to a separate pool.

(7) Each of the sub-schemes of an umbrella COACS is to be regarded as a separate co-ownership authorised contractual scheme, and the umbrella COACS as a whole is not so regarded.

(8) In relation to a sub-scheme of an umbrella COACS—

(a) references to chargeable interests are references to such of the chargeable interests as, under the pooling arrangements, form part of the separate pool to which the sub-scheme relates, and

(b) references to the scheme documents are references to such parts of the documents as apply to the sub-scheme.

(9) A co-ownership authorised contractual scheme is not to be treated as a company for the purposes of schedules 10 (group relief) and 11 (reconstruction relief or acquisition relief) of this Act.

(10) Anything required or authorised to be done under this Act by or in relation to the buyer in a land transaction is to be done by or in relation to the operator of a co-ownership authorised contractual scheme and accordingly section 44 does not apply in relation to a scheme to which this paragraph 9 applies except to the extent that sub-paragraph (12) below applies.

(11) Where the operator of the scheme is a body corporate, section 44 applies in relation to the operator, with the references to a company in those subsections having effect as though they were references to the operator.

(12) Further definitions for the purposes of co-ownership authorised contractual schemes are as follows—

(a) “operator” has the meaning given in section 237(2) of the 2000 Act, and

(b) “participant” has the meaning given in section 235 of the 2000 Act,

(c) “collective investment scheme” has the meaning given in section 235 of the 2000 Act,

(d) references to “the buyer” in sections 28, 29, 31, 33, 34 and 57(2) of this Act should be interpreted to mean the “operator”.”

Signatory text

Authorised to sign by the Scottish Ministers

St Andrew’s House,

Edinburgh

Date

Explanatory Note

(This note is not part of the Order)

This Order amends the Land and Buildings Transaction Tax (Scotland) Act 2013 to insert a new exempt treatment for certain transactions involving interests in co-ownership authorised contractual schemes.