In Ruth Anne Munro v Revenue Scotland [2019] FTSTC 6, the First Tier Tribunal (FTT) for Scotland found that the Land and Buildings Transaction Tax (LBTT) is payable when the return is submitted. If a tax return is submitted early, then the tax must also be paid early. If 'early tax' is paid late you receive a penalty.
- The Land and Buildings Transaction Tax is the Scottish equivalent of Stamp duty land tax.
- The taxpayer bought a residence on 10 August 2018. Their LBTT return was submitted on 13 August 2018 and the tax was paid on 17 September 2018.
- Revenue Scotland issued a penalty notice for £803 including £11 interest.
The taxpayer appealed, she argued that the penalty was absurd. She was being penalised because she was prompt in submitting a tax return.
The FTT stated that the return is due within 30 days of the transaction. In this case, the return could have been submitted on 9 September. Had it been so submitted, no penalty would have been incurred until 9 October, after the date the taxpayer had paid the tax.
Tax paid late triggers a penalty, even if the return could have been submitted later.
Comment
The tribunal said that the wording of the law is clear and based on statutory interpretation tax must be paid 30 days after the return’s submission.
Links
Land and Buildings Transaction Tax
Replacing stamp duty land tax, this subscribers' guide goves a full overview of transaction details, property types, relief and schedules.
LBTT vs SDLT: comparing the rates and additional dwellings charge - our subscribers' guide
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