Land and Buildings Transaction Tax - property investment funds: consultation

Questions

Part 1 – Co-ownership Authorised Contractual Schemes

Q1 - In your view, do the clauses as drafted work as intended to prevent an LBTT liability arising on the transfer of units within the CoACS?

Q2 – The draft clauses rely on various definitions set out in FSMA 2000. Are these definitions suitable for transactions in land and property situated in Scotland?

Q3 – In certain circumstances, the draft legislation seeks to treat the scheme operator as the buyer for purposes of the wider LBTT framework. Do these clauses work as intended?

Q4 – Should the Scottish Government consider amendments to the draft clauses to reflect any potential differences between Scots Law and property law elsewhere in the UK?

Q5 – Do you have any other comments, or proposed amendments, in respect of the legislation as drafted?

Part 2 – Reserved Investor Funds

Q6 - Should the transfer of units within RIFs be exempt from LBTT? Please set out further commentary on the basis of your views.

Q7 - If yes, should the LBTT treatment replicate the SDLT treatment of treating the RIF a company and units as shares? Please set out further commentary on the basis of your views.

Q8 - Are there any aspects of the existing SDLT framework which would need to be amended if equivalent LBTT arrangements were introduced?

Q9 - Are there any alternative approaches that the Scottish Government should consider?

Q10 - What would the impact be on investment in Scottish property if equivalent LBTT arrangements were not introduced?

Part 3 – Seeding relief

Q11 - Should seeding relief be introduced under LBTT? Please set out further commentary on the basis of your response.

Q12 - If yes, should the relief replicate that in place under SDLT?

Q13 - Are there any aspects of the SDLT framework which would need to be amended if equivalent LBTT arrangements were introduced?

Q14 - Are there any alternative approaches that the Scottish Government should consider?

Q15 - What would the impact be on investment in Scottish property if equivalent LBTT arrangements were not introduced?

Q16 - Should the Scottish Government consider bespoke seeding arrangements for any of the investment vehicles discussed in this consultation?

Q17 - If seeding relief is introduced in Scotland, should a different approach be taken to withdrawal of relief?

Part 4 - Addressing Tax Avoidance Risks

Q18 – Are amendments required to the draft legislation to ensure the exemption does not go beyond its’ intended scope – i.e. solely exempting the exchange of units within the scheme?

Q19 - If equivalent RIF arrangements are introduced under LBTT, is it appropriate to mirror the current SDLT safeguards?

Q20 - Should any specific or bespoke provisions be considered for the RIF framework under LBTT?

Q21 – in order to prevent artificial enveloping of properties, should the Scottish Government consider providing for seeding relief in respect of non-residential property only?

Q22 – Are there any other avoidance risks the Scottish Government should consider in respect of seeding relief?