In Dr Colin Goudie and Dr Amelia Sheldon v Revenue Scotland [2018] FTSTC 3, the First Tier Tribunal (FTT) for Scotland found that the Additional Dwelling Supplement would not be refunded where one of the occupants of the new property had never lived in the old property.

The FTT heard that a man co-owned a property with his brother and a friend. His partner had never lived there and he later moved out and bought a property with her. They paid the Land and Buildings Transaction Tax (LBTT) with Additional Dwelling Supplement (ADS).

The first property was sold and the man claimed a refund of ADS. This was denied because the wording of the statute, the Land and Buildings Transaction Tax (Scotland) Act 2013 'the Act', clearly states that ADS is only reclaimable if both parties had resided in the first property.

ADS is an additional charge to the Land and Buildings Transaction Tax (LBTT), the Scottish equivalent of the Stamp Duty Land Tax. It is payable when someone owns a second property. It may be reclaimed when someone sells a first property within 18 months of buying the second.

Much of the argument before the FTT concerned how to interpret the Act. Various arguments were put forward, such as following the intention of parliament and not leading to an absurd result. None of these arguments was sufficient to displace the clear wording of the Act.

Comment

ADS may be reclaimed where one partner owned a property which was sold to fund a co-owned property. What matters is that both partners lived in both properties.

Links

Land and Buildings Transaction Tax (LBTT)

Land and Buildings Transaction Tax: Additional Dwelling Supplement (ADS) 

LBTT vs SDLT: comparing the rates and additional dwellings charge

 

External link

Dr Colin Goudie and Dr Amelia Sheldon v Revenue Scotland [2018] FTSTC 3

The Land And Buildings Transaction Tax (Scotland) Act 2013

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