9. Returns Letters

Some suggested text for four scenarios where deeds may be returned by CAJR due to non-compliance with LBTT requirements is provided below:

Suggested text for when a notifiable lease is submitted accompanied by a C&S1 form and the C&S1 form states ‘NO’ for the LBTT questions and no section 43 can be made:

I regret that I am unable to register the deed submitted to the Books of Council and Session.

As you will be aware, the keeper has a statutory duty under the terms of section 43(1) of the Land and Buildings Transaction Tax (Scotland) Act 2013 to reject any application for registration of a document effecting or evidencing a notifiable transaction unless a land transaction return has been has been made in relation to said transaction and any tax due has been paid.

It appears that this transaction is a notifiable transaction in terms of section 30 of said 2013 Act given that the duration of the lease exceeds seven years and the rent is greater than £1,000 per annum (section 30(2)(a)).

Suggested text for when the agent has remained silent and CAJR cannot determine a notifiable transaction:

This text is specific to a particular deed, as indicated by the red text, and should be amended as necessary.

I regret that I am unable to register in the Books of Council and Session the assignation of rent deposit as requested given that you have remained silent on the terms of clause 3.2 of said deed.

In the absence of any detail in respect of the rent deposit, it is not possible to determine whether or not this transaction constitutes a notifiable transaction in terms of either SDLT or LBTT.

In the event that SDLT is chargeable, the keeper will require you to submit the SDLT Certificate in support of the deed before she may register it.

In the event that this transaction constitutes a notifiable transaction under the LBTT rules, the keeper will not be able to accept the deed for registration on the grounds that it is not accompanied by a C&S1 form. Upon receipt of said form, the keeper will search against data provided by Revenue Scotland in order that she may comply with her statutory duty under the terms of section 43 of the Land and Buildings Transaction Tax (Scotland) Act 2013.

In terms of section 43(1) of the Land and Buildings Transaction Tax (Scotland) Act 2013, the keeper may not accept an application for the registration of a deed effecting or evidencing a notifiable transaction unless a land transaction return has been made and either any tax due has been paid or arrangements satisfactory to Revenue Scotland have been made for the payment of the tax.

The Land and Buildings Transaction Tax (Ancillary Provision) (Scotland) Order 2014 prescribes that the keeper need not accept an application for registration of such a deed in the Books of Council and Session unless the application provides the information that she reasonably requires to enable compliance with her duties under section 43. Any acknowledgement of a validated LBTT return would not be sufficient for this purpose.

Rather the keeper has, with the support and agreement of both the Lord President of the Court of Session and the Law Society of Scotland, introduced a new C&S1 form. The Law Society of Scotland publicised this change in procedure in their Members' Bulletin of 7 January 2015.

Consequently, from 1 April 2015, it became mandatory for a C&S1 form to accompany any application for the registration in the Books of Council and Session of a deed effecting or evidencing a notifiable transaction in terms of LBTT.

Upon receipt of said form, the keeper will search against data provided by Revenue Scotland in order that she may comply with her statutory duty under the terms of section 43(1) of the Land and Buildings Transaction Tax (Scotland) Act 2013.

Alternatively, please advise the keeper, in writing, that the transaction is not notifiable under either the SDLT or LBTT rules.

Suggested text for when a notifiable deed is submitted but C&S1 form is missing:

I regret that I am unable to register the deed submitted to the Books of Council and Session on the grounds that it was not accompanied by a C&S1 form.

The introduction of the Land and Buildings Transaction Tax (LBTT) on 1 April 2015 has impacted upon the application process for deeds submitted for registration in both the Land Register and the Books of Council and Session.

In terms of section 43(1) of the Land and Buildings Transaction Tax (Scotland) Act 2013, the keeper may not accept an application for the registration of a deed effecting or evidencing a notifiable transaction unless a land transaction return has been made and either any tax due has been paid or arrangements satisfactory to Revenue Scotland have been made for the payment of the tax.

The Land and Buildings Transaction Tax (Ancillary Provision) (Scotland) Order 2014 prescribes that the keeper need not accept an application for registration of such a deed in the Books of Council and Session unless the application provides the information that she reasonably requires to enable compliance with her duties under section 43(1). Any acknowledgement of a validated LBTT return would not be sufficient for this purpose.

Rather the keeper has, with the support and agreement of both the Lord President of the Court of Session and the Law Society of Scotland, introduced a new C&S1 form. The Law Society of Scotland publicised this change in procedure in their Members' Bulletin of 7 January 2015.

Consequently, from 1 April 2015, it became mandatory for a C&S1 form to accompany any application for the registration in the Books of Council and Session of a deed effecting or evidencing a notifiable transaction in terms of LBTT.

It appears that this transaction is notifiable given that the duration of the lease exceeds seven years and the rent is greater than £1,000 per annum.

While submission of the form is only mandatory for notifiable transactions, the keeper strongly encourages applicants to use it for all applications submitted for registration in the Books of Council and Session. Where it is not clear from the terms of the deed that the transaction is not notifiable, it is particularly important that the applicant confirms the position on the application form.

Suggested text for when a notifiable deed is accompanied by a C&S1 form and the C&S1 form states "Yes" for LBTT questions but no section 43 match can be made:

Referral required before letter can be sent.

I regret that I am unable to register the deed submitted to the Books of Council and Session.

As you will be aware, the keeper has a statutory duty under the terms of section 43(1) of the Land and Buildings Transaction Tax (Scotland) Act 2013 to reject any application for registration of a document effecting or evidencing a notifiable transaction unless a land transaction return has been made in relation to said transaction and any tax due has been paid.

It appears that this transaction is notifiable given that the duration of the lease exceeds seven years and the rent is greater than £1,000 per annum.

CAJR policy on use of C&S1 form as at February 2017:

If application comes in without C&S1 Form but we get a s.43 hit – Accept.
If application comes in without C&S1 Form and there is no s.43 hit – Reject and request C&S1 Form upon resubmission.