Law Society welcomes proposal for new land and property tax
Published by Anne Marie Hughes on Sat 09 Jun 12 @ 22:17
The Law Society of Scotland has welcomed proposals to introduce a new property tax, following today's statement by John Swinney, Cabinet Secretary for Finance, Employment and Sustainable Growth, on the Scottish Government's approach to taxation.
The Law Society will respond to the 12-week consultation, which proposes the introduction of a new Scottish Land and Buildings Transaction Tax to replace the existing UK-wide Stamp Duty Land Tax (SDLT), which was introduced by the 2003 Finance Act.
Powers to create the tax are contained in the Scotland Act 2012, which - among other tax provisions, including setting a Scottish rate of income tax - fully devolves the power to raise taxes on land transactions and on waste disposal to landfill.
The Cabinet Secretary stated that the new tax would be based on Scots law, which would remove the difficulties associated with the current system of land tax due to the differences in property law throughout the UK.
Law Society of Scotland President, Austin Lafferty, said: "This is a particularly welcome announcement from the Cabinet Secretary. The proposals for a distinct Scottish property and land tax would introduce clarity where there has long been confusion and remove the often unnecessary anxiety and delay for solicitors' clients who are involved in property transactions."
Isobel d'Inverno, convener of the Law Society's Tax Law Committee, said: "Today's announcement represents a real opportunity to improve the current system in Scotland. The proposals take a commonsense approach and promote using existing expertise to replace the current, ill-fitting system of tax, with a better land transaction tax, built on Scots property law.
"The Law Society's Tax Law and Property Law committees have for many years made numerous representations to HMRC about the problems of applying SDLT to Scottish property transactions and have been instrumental in proposing changes to make the system more workable, including drafting the Scottish Lease chapter of HMRC's SDLT manual. However, the opportunities presented by introducing a tailored system that is easier to understand and to apply, would bring a clear benefit to Scottish solicitors and more importantly, to their clients.
"The Law Society's Tax and Property Law committees are committed to this process and look forward to engaging with the Scottish Government and other interested parties in developing a new system of land tax for Scotland."