Real estate transaction costs and taxes in Scotland

1. Due diligence costs for the purchase of real estate

Cost

From GBP 70–GBP 150 plus VAT

VAT

20%

1.2 Utility search (each service)

Cost

Water and Sewage Search usually included in the municipal search. Gas and Electricity searches vary with supplier

VAT

20%

Cost

GBP 85–GBP 105 plus VAT

VAT

20%

1.4 Company search, per company

Cost

From GBP 40-GBP 70

VAT

20%

1.5 Survey/Valuation fee, approx

Cost

1%-2%of purchase price

VAT

20%

1.6 Phase 1 Environmental survey

Cost

GBP 300-GBP 2,400, depending on size of land. 

VAT

20%

2. Costs associated with a contract for purchase of real estate and registering title

2.1 VAT on price

Cost

On full price if new building (being three years old or less) or tax option made (unless transfer
of a business).

VAT

20%

2.2 Transfer duty

Cost

Land and Buildings Transaction Tax (LBTT) – levied in three bands depending on the price (including VAT) of the property up to a maximum of 5% for non-residential and 12% for residential. The maximum rate of 5% for commercial property applies to the purchase price or premium paid for the property. Further LBTT of up to 2% may also be payable on the net present value of rents where the property purchased is by way of the grant of a lease. The rates of LBTT for residential property are split into 5 bands. An "additional dwelling supplement" of 4% is payable where the purchaser owns multiple properties

3. Tax or duty on the acquisition of shares in a company owning real estate

0,5%

4. Capital gain taxation on future disposal of real estate or shares in a company owning real estate

4.1 Tax on capital gains on the disposal of the real estate itself

Both UK and non-UK residents are within the scope of UK tax on capital gains.
Sale by a company: corporation tax of up to 19%.
Sale by an individual: capital gains tax of 18% or 28% for residential property and 10% or 20% for non-residential property.

4.2 Tax on capital gains on the disposal of shares in a company owning real estate

Sale by a company: corporation tax of up to 19%.
Sale by an individual: capital gains tax of 10% or 20%.

Portrait ofPaul Carter
Paul Carter
Partner
Glasgow
Portrait ofMark Joscelyne
Mark Joscelyne
Partner
London