Holyrood committee backs Scotland’s ‘fairer’ version of stamp duty

27 Mar 13
Holyrood’s finance committee has approved in principle Scottish Government plans to replace stamp duty with a more progressive form of property transaction tax.

By Keith Aitken in Edinburgh | 27 March 2013

Holyrood’s finance committee has approved in principle Scottish Government plans to replace stamp duty with a more progressive form of property transaction tax.

The change is included in the Land and Buildings Transaction Tax (Scotland) Bill, which contains Scotland’s first tax reforms following the devolution of UK stamp duty and other fiscal powers from Westminster. The Bill will also clamp down on tax avoidance and set up regular reporting procedures to allow Holyrood to monitor implementation.

In the report on the Bill, published today, the finance committee said that both the committee and the witnesses from whom it took evidence backed the government’s approach.

Chair Kenneth Gibson said: ‘We are pleased to support the general principles of the Bill that introduce a fairer, more progressive approach to ‘stamp duty’ as well as addressing the issue of tax avoidance on the buying and selling of land and property in Scotland.’

The stamp duty reforms are due to come into force in 2015. The current ‘slab’ structure charges stamp duty on the entire value of a property. Under the Scottish Government’s proposed changes it would be increased more gradually, with higher tax rates applied only to the proportion of the property’s value above a certain threshold or thresholds. 

Two further consequential Bills are scheduled, one next month to take account of devolved control over landfill tax, and another in the autumn to reform tax collection arrangements ahead of the more major Scotland Act changes over income tax, due to take effect in 2016.

Ministers are setting up Revenue Scotland, a small body which will work with Registers of Scotland and the Scottish Environmental Protection Agency and will be charged with collecting and administering the new taxes at a lower cost than the UK’s Revenue and Customs department.

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