MacPhee
MacPhee

LBTT – Reviewing Commercial Leases

Christine and Rebecca deal with all the Firm’s commercial leases and would like to remind all their clients that there is a statutory requirement on all tenants under a commercial lease, which attracted a tax liability and which was entered into on or after 1st April 2015, to submit a further tax return within 30 days of every third anniversary of the lease (i.e. year 3, year 6, year 9 and so on). The three yearly review return will inform Revenue Scotland of any changes (e.g. an increase/decrease in rent, and increase/decrease in the term of the lease etc.) that have occurred since the original tax return was submitted, or since the last review was submitted, and will allow Revenue Scotland to review the amount of tax that was originally paid.  Ultimately, you may have to pay additional tax depending on the changes that have occurred.  Please note however if the lease attracted a tax liability but there have been no changes to the terms of the lease, you will still require to submit a further tax return on every third anniversary of the lease. Clients should be aware that commercial leases entered into on or after 1st April 2015 may need to be reviewed from a tax perspective very soon as we expect the first review returns to fall due from 1st April this year.

If you have any questions or queries regarding this, or any other commercial property matter, please do feel free to contact either Christine ([email protected]) or Rebecca ([email protected]) or on 01397 701000 who will be happy to assist in any way possible.