Meeting of the Parliament 06 March 2018
There have been a number of heated debates and exchanges over the past of couple months, mainly over the budget and certainly between me and Mr Mackay. I want to make clear at the outset of this debate that I fully support the proposals that have been brought forward on the land and buildings transaction tax. I commend Mr Mackay for his approach in listening to stakeholders and to the issues that were raised by committee members—principally Murdo Fraser—and for bringing forward corrective action. It is very welcome.
The purpose of the land and buildings transaction tax was to levy a tax on those who purchase property. In the original legislation, the approach was to treat couples, including those in civil partnerships or who are cohabiting, as one domestic unit, in order to seek to ensure that people were not avoiding tax. That seemed a reasonable approach.
However, as other members have outlined, if people sought to claim relief from the ADS where they had purchased a property and sold one in the previous 18 months, they were caught by inconsistent treatment, which is against the principles of fair taxation. In addition to the changes that were introduced by order last year, the bill addresses, retrospectively, the position of those who were caught by the policy prior to May 2017, which, again, seems a reasonable approach. I am encouraged by the fact that the bill has been well supported by the stakeholders who engage on this issue, including the Law Society of Scotland and those who participate in the relevant forum.
The financial memorandum states that the bill will have a financial impact of between £655,000 and £1.55 million. Although that is a relatively small amount as regards the overall budget, it will have an impact on it and it will be interesting to learn from the cabinet secretary where that will be drawn from.
Some of the responses that were made to the consultation on the bill introduced other issues relating to how we, as a Parliament, might better manage taxation. It is right to look at such issues—particularly given that, as we now have increased tax powers, more such technical issues might come up and require to be tidied up. It seems reasonable to look at the idea of an annual taxation bill through which we can tidy up any unintended consequences.
The measure that we are debating today is a necessary one. I commend the work that has been done by the Finance and Constitution Committee’s members, witnesses and clerks. I also commend the cabinet secretary for introducing appropriate legislation to correct the loophole and ensure that those who have been caught unfairly by the way in which the original legislation was drafted can seek appropriate redress.