Why getting the right advice on LBTT and ADS matters more than ever

Today saw Angela Rayner resign as Deputy Prime Minister following recent controversy surrounding alleged underpayment of Stamp Duty Land Tax (SDLT), reigniting public and professional scrutiny of property tax compliance. While the Rayner case pertains to SDLT in England, it serves as a timely reminder of the complexities – and potential pitfalls – of its Scottish counterpart: Land and Buildings Transaction Tax (LBTT) and the Additional Dwelling Supplement (ADS).

In Scotland, LBTT applies to most property transactions, with ADS acting as a surcharge on purchases of additional residential properties. Since its introduction in 2016, ADS has evolved through multiple legislative amendments, most recently in April 2024, when the Scottish Government extended key timelines from 18 to 36 months and introduced reliefs for inherited properties and certain court-ordered retentions. These changes, while welcome, have added further layers of complexity to an already complex regime.

The Rayner case underscores that even high-profile individuals with access to legal advice can fall foul of property tax rules. In Scotland, the stakes are no less significant. Misunderstanding the ADS rules – such as when a property counts as a “main residence,” or how joint ownership and economic unit provisions apply – can lead to costly errors, missed reliefs, or overpayments that may not be recoverable.

Our experience shows that even seasoned property developers and investors can be caught out by nuances in the legislation. For example, a recent Tribunal case involving grazing land highlighted the ambiguity around mixed-use classification and the importance of relying on competent legal advice rather than assumptions.

An experienced lawyer is essential to guide you through a structured process that includes pre-engagement scoping, early-stage advice, and detailed questionnaires to assess ADS liability. A dedicated LBTT and SDLT Enquiry resource can support colleagues and clients alike with bespoke guidance.

The cost of getting it wrong can be substantial—not just financially, but reputationally. As the Rayner case illustrates, tax compliance is not merely a technical issue; it is a matter of public trust. For professionals, investors, and families navigating the Scottish property market, the message is clear: don’t leave LBTT and ADS to chance.

Whether you are buying your first home, acquiring a portfolio of rental properties, or restructuring family assets, expert advice is a necessity.

How we can help

At Anderson Strathern, we regularly advise clients on LBTT and ADS matters, ranging from straightforward residential purchases to complex multi-property transactions and mixed-use claims. We combine deep technical knowledge with practical experience to ensure our clients stay compliant, informed, and protected. You can contact our expert Nick Dobbs anytime for advice on the issues raised in this article at Nick.Dobbs@andersonstrathern.co.uk