Land and Buildings Transaction Tax (Scotland) Act 2013

• (4) If less than 10% of the investment zone consideration is attributable to land that satisfies the condition in paragraph 6(1)(b) then, for the purposes of this schedule, none of the investment zone consideration is to be treated as being attributable to qualifying investment zone land.

Part 3 — Key terms

5

In this schedule, “transaction land”, in relation to a land transaction, means land a chargeable interest in which is the subject matter of the transaction.

6

• (1) For the purposes of this schedule, transaction land is “qualifying investment zone land” to the extent that, on the effective date of the transaction—

• (a) it is situated in an investment zone tax site, and

• (b) the buyer intends it to be used exclusively in a qualifying manner.

• (2) In this schedule, “investment zone tax site” means an area in Scotland which—

• (a) is within an area which is identified as an investment zone in a document published by, or with the consent of, the Treasury for the purposes of section 113 of the Finance Act 2021 (and not withdrawn), and

• (b) has been designated by regulations made under that section.

7

• (1) For the purposes of this schedule, transaction land is used in a qualifying manner if it is used in one or more of the following ways—

• (a) it is used by the buyer or a connected person in the course of a commercial trade or profession,

• (b) it is developed or redeveloped by the buyer or a connected person for use (by any person) in the course of a commercial trade or profession,

• (c) it is exploited by the buyer or a connected person, in the course of a commercial trade or profession, as a source of rents or other receipts (other than excluded rents).

• (2) But land is not used in a qualifying manner to the extent that it is—

• (a) used as a dwelling or as the garden or grounds of a dwelling (including any building or other structure on such land),

• (b) developed or redeveloped to become residential property,

• (c) exploited as a source of rents or other receipts payable by a person using the land as a dwelling or as the garden or grounds of a dwelling, or

• (d) held (as stock of the business) for resale without development or redevelopment.

• (3) For the purposes of this paragraph, use of land in the course of a commercial trade or profession includes use of land for a purpose that is ancillary to the use of other land which—

• (a) is situated in an investment zone tax site, and

• (b) is being used, or developed or redeveloped, in the course of a commercial trade or profession.

• (4) The references in this paragraph to doing something in the course of a commercial trade or profession include doing something in the course of a property rental business.

• (5) In this paragraph—

• “commercial”, in relation to a trade or profession, means carried on—on a commercial basis, andwith a view to profit,

• “excluded rents” means rents within any of classes 2 to 6 in the table in section 605(2) of the Corporation Tax Act 2010,

• “property rental business” means a property business as defined in Chapter 2 of Part 3 of the Income Tax (Trading and Other Income) Act 2005.

Part 4 — Withdrawal of relief

8

• (1) The relief is withdrawn if, at any time during the control period, the qualifying investment zone land is not used exclusively in a qualifying manner.

• (2) But the relief is not withdrawn where, because of a change in circumstances that is unforeseen and beyond the buyer’s control, it is not reasonable to expect the qualifying investment zone land to be used exclusively in a qualifying manner at that time.

• (3) Where, at a time during the control period, the use of all or part of the qualifying investment zone land in a qualifying manner has not yet begun, that land (or that part of the land) is to be treated as being used exclusively in a qualifying manner if reasonable steps are being taken to ensure that it is used in that manner.

• (4) Where, at a time during the control period, the use of all or part of the qualifying investment zone land in a qualifying manner has ceased, that land (or that part of the land) is to be treated as being used exclusively in a qualifying manner if reasonable steps are being taken—

• (a) to ensure that it is used in that manner, or

• (b) to dispose of all chargeable interests in that land (or that part of the land) that are held by the buyer and connected persons in a timely manner.

• (5) Where the relief is withdrawn, the amount of tax chargeable is the amount that would have been chargeable in respect of the transaction but for the relief.

9

• (1) In this schedule, the “control period”, in relation to a land transaction, means the shorter of—

• (a) the period of three years beginning with the effective date of that transaction, and

• (b) the period beginning with the effective date of that transaction and ending with the effective date of the final transaction.

• (2) For the purposes of this paragraph, a land transaction is the “final transaction” if, immediately after the effective date of the transaction, neither the buyer nor a connected person holds a chargeable interest in the qualifying investment zone land (whether as a result of that transaction alone or as a result of that transaction and other land transactions).

10

• (1) This paragraph applies where the buyer ceases to hold a chargeable interest in part of the qualifying investment zone land during the control period.

• (2) The references in paragraphs 8 and 9 to the qualifying investment zone land are to be treated as references only to the part of the qualifying investment zone land in relation to which the buyer still holds a chargeable interest (whether the chargeable interest acquired in the land transaction in respect of which relief was allowed under Part 2 of this schedule or another chargeable interest).

Part 5 — Alternative finance arrangements

11

• (1) This paragraph applies where schedule 7 applies.

• (2) This paragraph applies for the purposes of determining—

• (a) whether relief is available under Part 2 of this schedule for the first transaction,

• (b) whether relief allowed for the first transaction is withdrawn under Part 4 of this schedule.

• (3) For those purposes this schedule has effect as if—

• (a) references to the buyer were references to the relevant person,

• (b) the reference in paragraph 7(2)(d) to land held (as stock of the business) for resale without development or redevelopment were a reference to land held in that manner by the relevant person.

• (4) The first transaction does not qualify for relief under Part 2 of this schedule except where it does so by virtue of this paragraph.

• (5) In this paragraph—

• “the first transaction” has the same meaning as in schedule 7,

• “the relevant person” means the person, other than the financial institution, who entered into the arrangements mentioned in schedule 7.