Hansard

This is part 2 in this afternoon’s act. It will probably be a far more consensual debate than the previous one. It is a shame that Mr Simpson has departed from the chamber, because his use of the books of Dickens to characterise me has inspired the BBC. I hope that there will be no conjuring up of more such impressions of me in this debate, which will show what a reasonable person I am.

Just short of three years ago, the land and buildings transaction tax came into effect in Scotland, alongside the Scottish landfill tax. They were the first new national Scottish taxes to be introduced by a Scottish Parliament in more than 300 years.

Subsequently, in 2016, the Parliament approved legislation to introduce the LBTT additional dwelling supplement, which is a 3 per cent additional rate of tax that is applied to certain house purchases. The supplement applies where, at the end of the day that is the effective date of a transaction, a buyer owns more than one dwelling and the buyer is not replacing a main residence. Where the additional amount is paid, the legislation provides that it can be reclaimed when a main residence is being replaced and the sale of the previous main residence occurs within 18 months of the purchase of what then becomes the current main residence.

The introduction of the original LBTT legislation and the subsequent introduction of the additional dwelling supplement were important milestones on Scotland’s tax journey, but it is important to acknowledge and recognise that, on occasion, there will be a need for change. Tax is complex and it is inevitable that, at times, amendments will be required or desirable to improve operation, or for other reasons.

Reflecting that fact, the Scottish approach to taxation is founded in part on effective engagement and partnership working with stakeholders. It was as a consequence of that engagement, which included engagement with MSPs, that, last summer, I introduced secondary legislation to address a specific issue that had been highlighted in relation to the treatment of married couples, civil partners and co-habitants—referred to as an economic unit—in the ADS legislation.

The order that was approved by the Parliament in June 2017 addressed the scenario in which a couple jointly buy a new main residence, but only one of the couple’s names was on the title deeds of their shared previous main residence. Its effect was to ensure that relevant couples did not have to pay the additional dwelling supplement or could claim repayment of the supplement when their previous main residence was sold within the 18-month period.

Although the order addressed the issue for transactions that took place after it came into effect, it could not apply to transactions that had taken place previously, and members of the Finance and Constitution Committee and stakeholders rightly raised that as a concern during their scrutiny of the order.

The Scottish Government agrees with that view, so it has introduced the Land and Buildings Transaction Tax (Relief from Additional Amount) (Scotland) Bill to deliver parity for all taxpayers, regardless of the effective date of their transaction. The bill is single-minded in its focus and scope, in that it serves solely to give retrospective effect to the provisions of the 2017 order. I thank the Finance and Constitution Committee for its scrutiny of the bill, and I welcome its support for the bill’s general principles.

I recognise, of course, that stakeholders have raised a number of other issues around the additional dwelling supplement and the approach to devolved taxes more widely. I welcome their input and engagement and take seriously the points that they have raised. I assure members that, although they are outwith the scope of this bill, the issues that were raised in the submissions will be considered. However, many of the asks would involve a much more significant amendment to the legislation, so they will require further attention.

On the issue of group reliefs specifically, I intend to bring forward a consultation on draft secondary legislation to address for future transactions the concerns that stakeholders have raised. Such legislation would deliver parity of approach between LBTT and stamp duty land tax in this area.