Commercial Property in Scotland: What Is Different
Written by Scott Jones, founder of CommercialPropertyKiln · Last updated
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Commercial property law and tax in Scotland differ from England in important ways. If you own or buy commercial property north of the border, do not assume the English rules apply.
Land and Buildings Transaction Tax
Scotland has its own transfer tax, LBTT, collected by Revenue Scotland, instead of SDLT. The non-residential rates are:
- Up to 150,000: 0%
- 150,001 to 250,000: 1%
- Above 250,000: 5%
There is also a charge on the rent of a new lease, calculated on the net present value (NPV) of the rent using the 3.5% discount rate. The Scottish lease NPV bands are:
- Up to 150,000: 0%
- 150,001 to 2,000,000: 1%
- Above 2,000,000: 2%
LBTT lease returns must be resubmitted every three years with the NPV recalculated, so the tax can change if the rent does.
Non-domestic rates
Rateable values are set by the Scottish Assessors, and the poundage (the multiplier) is set by the Scottish Government. Reliefs differ too, notably the Small Business Bonus Scheme rather than the English small business rate relief. So the business rates approach is similar in principle but different in the detail.
Lease law is genuinely different
This is the big one. Scotland has no equivalent of the 1954 Act, so business tenants have no statutory right to renew. Instead, leases can continue automatically by tacit relocation unless proper notice to quit is given, and a landlord's remedy for breach is irritancy rather than forfeiture. The concepts and the notices are different, so use a Scottish solicitor.
Get Scottish advice
The EPC and MEES regime, and much of the compliance framework, also have Scottish specifics. Take advice from Scottish professionals rather than relying on English guidance. For the other nations, see Wales and Northern Ireland, and the law reform tracker.
Does the 1954 Act apply in Scotland?
No. Scotland has no equivalent, so business tenants have no statutory right to renew. Leases can continue by tacit relocation, and irritancy replaces forfeiture.
What transfer tax applies in Scotland?
LBTT, collected by Revenue Scotland, with non-residential rates of 0% up to 150,000, 1% to 250,000 and 5% above.