Proposed change would help those moving home, say tax specialists

Tax specialists say the Scottish Government should give Revenue Scotland a discretionary power similar to HMRC to waive an additional homes tax in exceptional circumstances.

The 6% Additional Dwelling Supplement is paid in addition to standard rates of property tax when a buyer owns another property.

In the rest of the UK, HMRC has the power to waive higher this additional payment, for instance when a buyer has purchased a new home and been unable to sell their previous main residence due to circumstances beyond their control,

However, despite the measure being supported by 96% cent of respondents to a Scottish Government consultation, ministers have decided not to include it in draft legislation expected later this year.

The Chartered Institute of Taxation (CIOT) and Association of Taxation Technicians (ATT) are now calling for the government to rethink its opposition.

Sean Cockburn, chair of the CIOT’s Scottish Technical Committee, said: “The decision to exclude consideration of an exceptional circumstances provision for taxpayers in unforeseen and unavoidable circumstances is disappointing and threatens the original intention of ADS, which is to charge those who intend to own multiple properties higher rates of tax.

“Experience in England and Northern Ireland suggests that such a provision is unlikely to open the floodgates to spurious claims or lead to taxpayers seeking to abuse the system to their benefit.

“Properly administered, it would give Revenue Scotland the ability to exercise discretion and to consider claims for repayment based on their individual merits.

“We would recommend that the Scottish Government thinks again”.

Senga Prior, chair of the ATT Technical Steering Group, added: “Giving Revenue Scotland greater flexibility to consider individual cases on their merits would help ensure consistency across the different property tax regimes in the UK and would allow for greater fairness in the event of taxpayers encountering circumstances outside their control”.

Funding for affordable homes

Up to £25 million is being made available to help councils identify affordable homes for key workers in rural communities.

The five-year initiative will enable local authorities and registered social landlords to acquire or lease properties which can be used to provide homes to meet the needs of their communities. 

Housing Minister Paul McLennan said: “Good quality affordable housing is essential to attract and retain people in rural communities, particularly in areas where key workers are needed.

“Delivering affordable homes is a priority for this government. We have committed to delivering 110,000 affordable homes across Scotland by 2032 – with at least 10% in remote, rural and island areas.

“Our upcoming delivery plan will set out actions to support our rural and island communities including areas such as transport, repopulation and economic development.”