The draft Scottish Budget for 2020/21 was announced by Scottish Public Finance minister Kate Forbes on 6 February 2020. This budget had been delayed due to the general election being scheduled for the same day.

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

It was announced that there would be no change to Scottish income tax rates for 2020/21, which is in line with the promise made previously that there would be no rate change during the current parliament.

As for prior tax years, Scottish taxpayers remain eligible for the UK personal allowance. The 2020/21 allowance level is currently not known for certain as the Chancellor of the Exchequer will not present his 2020 budget until 11 March this year.

Changes were proposed to income tax bands in line with inflation, however the higher rate threshold was frozen.

The proposed new bands are:




Band of income


Personal allowance (tax -free band)


 Up to 12,500

Starter rate



Basic rate



Intermediate rate



Higher rate



Additional rate




Land and buildings transaction tax (LBTT)

Non-residential leases:

It is proposed to introduce 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 is over £2m.

  • Currently, there is one rate of 1% which applies where the NPV is over £150,000.
  • The change will take 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)

Scottish Income tax: Am I a Scottish taxpayer?


Scottish Budget 2020-21


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