Scottish Public Finance Minister Kate Forbes announced the draft Budget for 2020/21 on 6 February 2020.

Scottish Income Tax has applied since April 2016 and is payable by Scottish taxpayers on non-savings income only. This followed the 2015 introduction of Land and Buildings Transaction Tax (LBTT) which replaced Stamp Duty Land tax in Scotland.

Income Tax

From 6 April 2020

  • No changes to Income Tax rates or to the basic personal allowance.
  • Scottish taxpayers continue to be eligible for the UK personal allowance. The 2020/21 personal allowance remains unchanged as confirmed in the 2020 Budget.
  • Changes were proposed to Income Tax bands in line with inflation, however the higher rate threshold was frozen.

The proposed new bands are:

2020/21

Rate

%

Band of income

£

Personal allowance (tax -free band)

0

 Up to 12,500

Starter rate

19

12,500-14,585

Basic rate

20

14,586-25,158

Intermediate rate

21

25,159-43,430

Higher rate

41

43,430-150,000

Additional rate

46

150,000+

 

Land and buildings transaction tax (LBTT)

Non-residential leases:

A new 2% band for leases on non-residential property, where the net present value (NPV) of the rental income over the period of the lease exceeds £2m.

  • Currently, there is one rate of 1% which applies where the NPV is over £150,000.
  • The change took effect from 7 February 2020 but will not apply where the contract for the transaction was entered into before 6 February 2020.

Links to our guides

Land and Buildings Transaction Tax (LBTT)
Land and Buildings Transaction Tax (LBTT) is a tax on transactions in land situated in Scotland. It replaced Stamp Duty Land Tax (SDLT) on 1 April 2015.

Scottish Income tax: Am I a Scottish taxpayer?
Who does the Scottish Income Tax apply to? Am I resident in Scotland? What constitutes a residence and the 'main' residence?

External links

Scottish Budget 2020-21

 

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