The Scottish government plans to make several changes to the rules concerning when the additional dwelling supplement applies to residential property purchases.
Commenting on the draft legislation in ICAEW REP 29/23, ICAEW’s Tax Faculty expressed disappointment that the Scottish government has chosen not to align its rules on inherited interests with those in operation in England, Wales, and Northern Ireland. While acknowledging that the Scottish government is free to set the rules in line with the policy intent, the faculty highlights that divergence between the rules in Scotland and the rest of the UK creates complexity for taxpayers and increases the risk of taxpayer error.
ICAEW also responded to selected specific questions in the consultation where it considers the draft legislation could be improved. This includes clarifying when property is inherited, the rules on divorce and separation, and the economic unit provisions.
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