A Technical Bulletin issued by Revenue Scotland confirms that in-specie transfers of Scottish Properties between pension schemes will not be subject to the Land and Buildings Transaction Tax.
In its October 2016 LBTT Bulletin, Revenue Scotland published a brief statement to clarify its view of the treatment for LBTT purposes of in-specie transfers between pension funds.
The October bulletin indicated that, in-specie transfers between pension schemes were subject to the charge because such a transfer is a land transaction and the assumption of liability by the receiving pension fund is debt as consideration. However, following further representations on the matter, Revenue Scotland has now concluded that while such transfers are still considered to be land transactions, debt in the form of the liability assumed to pay benefits to pension scheme beneficiaries will not generally be considered to be given as chargeable consideration in relation to such transactions. However, any consideration given in the form of money or money’s worth for the transfer of the properties will be chargeable to LBTT.
Revenue Scotland has also confirmed that if LBTT has been paid they will consider a repayment and applications should be made by amending their original submission.
This is good news for those that may want to move pension providers but currently hold commercial property in their portfolio. This brings the treatment of these types of transfers back in line with HM Revenue and Customs so as not to disadvantage those who hold Scottish properties in their pension schemes.
In-specie transfers should not be confused with in-specie contributions where Stamp Duty Land Tax (England) and Land and Buildings Transaction Tax (Scotland) would apply.
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