How do the Autumn Statement measures affect Scotland?

26 November 2015

Stephen Hay

Scottish taxpayers could be forgiven for being a little confused about the Autumn Statement as a number of the announced measures won’t affect Scotland in the same way as the rest of the UK.

There were a number of tax measures announced yesterday which don’t affect Scotland in the same way as in the rest of the UK. These include:

  • A three per cent Stamp Duty Land Tax surcharge for buy-to-lets and second homes from April 2016. As Scotland has its own Land and Buildings Transaction Tax (LBTT), this measure will not apply. However, proposals that from April 2019 Capital Gains Tax (CGT) will need to be paid within 30 days of a residential property sale will apply as CGT is not currently being devolved to Scotland. This measure will bring forward payments by up to 21 months and require vendors to be better organised by having information available to calculate gains on disposal. The payment date will not apply to qualifying principal private residences. Mr Swinney will no doubt give some consideration to following the Chancellor in his Scottish Budget on 16 December by introducing a surcharge for landlords. However, if he doesn’t, could we see small property investors in the rest of the UK seeking to increase their portfolios north of the Border?
  • The introduction of a new penalty of 60 per cent of tax due to be charged in all cases successfully tackled by the General Anti-Abuse rule. The complication here is that Scotland has its own General Anti-Avoidance Rule which applies to taxes that Revenue Scotland is responsible for (currently LBTT and Landfill Tax). It’s likely that the Scottish Rate of Income Tax will come under the Scottish GAAR and if corporate taxes are devolved in due course, they may also be subject to the Scottish rule, but quite how the two disparate rules will interact is currently unclear.

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