Revenue Scotland updates tax calculator for ADS

Introduced tomorrow, an additional amount of Land and Buildings Transaction Tax (LBTT), known as the Additional Dwelling Supplement (“the ADS”), is due on the purchase of additional dwellings in Scotland, such as buy-to-let properties and second homes.

The ADS applies to most purchases of additional dwellings by individuals in Scotland where, at the end of the day that is the effective date of the transaction, a buyer owns two or more dwellings and is not replacing their main residence. It also applies to most purchases of dwellings by non-natural persons (eg companies, partnerships) in Scotland.

The ADS will only apply to a transaction involving a purchase of additional property where (a) the contract for the transaction was entered into on or after 28 January 2016 and (b) the effective date of that transaction is on or after 1 April 2016.

Revenue Scotland has updated its tax calculator to provide for ADS calculations. Guidance has been published for the legislation and updated instructions on how to make a return for transactions where the supplement is due will also be available for the online return being deployed.