The ADS is an additional charge, added to any land and buildings transaction tax (LBTT) that may be due on residential property in Scotland. It can apply when: 

• you buy a residential property in Scotland and you already own one or more residential properties anywhere in the world;
• there are two or more buyers: if any buyer already owns one or more residential properties anywhere in the world; and
• you are not replacing or selling your ‘only or main’ residence. 

Following a call for evidence on the ADS, Revenue Scotland has released draft clauses for consultation. 

The changes seek to: 

• increase the relevant timelines for purchase and sale of a new main residence from 18 months to 36 months;
• amend the existing provisions in respect of inherited property;
• provide that, where individuals have an interest in a share of property and that share has a value of less than £40,000, this will not be taken into account for the purposes of determining whether ADS is due;
• exclude interests in a previous main residence (PMR) that are required to be retained by court order or other comparable legal document on separation or divorce from being counted for the ADS;
• treat both buyers as meeting the repayment conditions where a main residence is purchased jointly and only one buyer can meet the relevant conditions (disposal of PMR that was their only main residence), if no additional relevant properties are held;
• allow disposals of a PMR in the 36 months prior to purchase of a new jointly held main residence to be considered in determining if the ADS is repayable; 
• allow the disposal of a property in which a buyer is deemed to have an interest, by virtue of the economic unit provisions, to be treated as a disposal by the buyer for the purposes of determining ADS liability; and
• provide relief for local authorities from LBTT and ADS where the purchase is funded under s2, Housing (Scotland) Act 1988. 

If anybody wishes to provide input into ICAEW’s response to the draft clauses, please contact Lindsey Wicks by Monday 20 March 2023.