Hansard

I support the bill. Like Bill Bowman, I am likely to repeat what other members have said.

The cabinet secretary and others have set out the details of what the bill will achieve. It is unusual to introduce and pass retrospective legislation but, in this case, it is absolutely the right thing to do. The bill corrects an anomaly and an unintended unfairness that was introduced by the Land and Buildings Transaction Tax (Amendment) (Scotland) Act 2016. At the time, the Scottish Government’s intention was clear: it wanted to levy an additional tax on those who purchased a property in Scotland and who already owned another property. Rightly, the Scottish Government recognised that a situation can often arise in the purchase of a property whereby an individual or a couple become, for a short period, the owner or owners of two properties. That is why, as has been said, a period of grace of up to 18 months was introduced, in which, if the person or couple purchasing a second property then disposed of their first property, they were able to reclaim the additional amount of LBTT that had been paid.

However, as other members have said, it has become clear that, in trying to ensure that married couples, civil partners and cohabitants do not move property between individuals for tax avoidance purposes, the anomaly or unintended consequence to which I previously referred has been created. The Parliament has legislated for a situation whereby spouses, civil partners and cohabitants are liable—as a single purchaser would be—for the additional taxation when jointly buying a home to replace a home that was owned by only one of them. As other members have said, such people were subject to the additional dwelling supplement if only one name was listed on the deeds. However, unlike a single person or a couple who were both listed as owners of the original property, those who were not listed as owners of the original property but were listed as joint owners of the new property not only became liable for the additional tax but, unfairly, could not reclaim that tax if the original property was disposed of within 18 months. It is only fair, therefore, not just to address that anomaly for all future purchases but to compensate those who have been unfairly charged since the ADS was introduced.

Everyone accepts that the easiest way to address such anomalies is by the use of secondary legislation. Unfortunately, retrospective legislation cannot be effected by secondary legislation unless there is a specific expressed power, which, in this case, does not exist—hence the bill, which has cross-party support and the support of key stakeholders. Although I support the bill, I will highlight wider concerns that were brought to the attention of the committee by those key stakeholders. As we have heard, the Law Society of Scotland has highlighted that the bill will not address other changes to LBTT that it believes are urgently required. I accept that there is no opportunity to do that here, but I hope that the cabinet secretary will reflect on what the Law Society has said and come back to the Parliament with suggestions about how that can be looked at in the future.

I have referred to anomalies and unintended consequences, and it is worth reflecting on another relevant issue that was raised by the Chartered Institute of Taxation, the Law Society, the Scottish Property Federation and the Institute of Chartered Accountants of Scotland, which is that there should be a way of addressing technical issues that occur in our new devolved tax system. As James Kelly and others have said, the idea of an annual Scottish finance or tax bill is a good one; I therefore ask the cabinet secretary for a commitment that the Scottish Government will fully consider that.

If the Parliament decides that retrospective legislation is needed to address an anomaly, it would be pointless if the intended beneficiaries of that legislative change were unaware of their entitlement to claim a refund. I accept arguments against engaging in an expensive publicity exercise, but I hope that Revenue Scotland can make detailed proposals about how those who are affected will be identified and notified. As has been said, the legal world and the Law Society have an important role to play. Those who are affected will inevitably have instructed a solicitor, so I suggest that the Law Society be encouraged to encourage its members to identify clients who fit the relevant profile in the identified period and to contact those clients to make them aware that there has been a change that could benefit them.

Although the bill is unusual in that it proposes to have a retrospective impact, it is straightforward, has unanimous support and will address a small but significant unfairness. I therefore support the committee’s recommendation that the bill be supported.