Commercial development—indirect tax issues
Commercial development—indirect tax issues

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • Commercial development—indirect tax issues
  • SDLT—basic charge to SDLT on commercial property
  • SDLT—contract providing for conveyance to third party
  • SDLT—chargeable consideration
  • SDLT—reliefs
  • SDLT—Property holding company
  • Value added tax (VAT)

This Practice Note considers the indirect tax issues which can arise on the development of land. These issues often arise irrespective of whether the land is intended for residential use or otherwise, but there are some specific tax rules which apply in the residential context. The direct tax issues which arise on commercial property development transactions are considered in Practice Note: Commercial development—direct tax issues and the tax issues which arise where land is developed for residential use are considered in Practice Notes: Residential development—direct tax considerations and Residential development—indirect tax considerations. The tax considerations involved in both commercial development and residential development are compared and contrasted in Commercial development v residential development (tax issues)—checklist.

The indirect tax issues considered in this Practice Note are only an introduction to those which will arise on a typical development project. Each project will have its own intricacies, from the most simple residential conversion to the largest shopping centre development. The issues considered below are also generally covered in more detail in the following subtopics and reference should be made to them as necessary:

  1. stamp duty land tax (SDLT)

  2. VAT on property, and

  3. VAT—basic principles

SDLT ceased to apply to any land transaction involving any interests in or over land in Scotland from 1 April 2015. From that date, land and buildings transaction tax (LBTT) applies