ICAEW.com works better with JavaScript enabled.


Revenue Scotland consults on changes to additional dwelling supplement


Published: 28 Feb 2023 Update History

The 6% additional dwelling supplement (ADS) is charged on buying an additional residential property (dwelling) in Scotland. Revenue Scotland is consulting on changes to the rules, which will affect timelines, inherited property, small shares, divorce or separation, joint buyers, economic units, and local authorities.

The ADS is an additional charge, added to any land and buildings transaction tax (LBTT) that may be due on residential property in Scotland. It can apply when: 

  • you buy a residential property in Scotland and you already own one or more residential properties anywhere in the world;
  • there are two or more buyers: if any buyer already owns one or more residential properties anywhere in the world; and
  • you are not replacing or selling your ‘only or main’ residence. 

Following a call for evidence on the ADS, Revenue Scotland has released draft clauses for consultation

The changes seek to: 

  • increase the relevant timelines for purchase and sale of a new main residence from 18 months to 36 months;
  • amend the existing provisions in respect of inherited property;
  • provide that, where individuals have an interest in a share of property and that share has a value of less than £40,000, this will not be taken into account for the purposes of determining whether ADS is due;
  • exclude interests in a previous main residence (PMR) that are required to be retained by court order or other comparable legal document on separation or divorce from being counted for the ADS;
  • treat both buyers as meeting the repayment conditions where a main residence is purchased jointly and only one buyer can meet the relevant conditions (disposal of PMR that was their only main residence), if no additional relevant properties are held;
  • allow disposals of a PMR in the 36 months prior to purchase of a new jointly held main residence to be considered in determining if the ADS is repayable; 
  • allow the disposal of a property in which a buyer is deemed to have an interest, by virtue of the economic unit provisions, to be treated as a disposal by the buyer for the purposes of determining ADS liability; and
  • provide relief for local authorities from LBTT and ADS where the purchase is funded under s2, Housing (Scotland) Act 1988. 

If anybody wishes to provide input into ICAEW’s response to the draft clauses, please contact Lindsey Wicks by Monday 20 March 2023. 

The Tax Faculty

ICAEW's Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

More support on tax

ICAEW's Tax Faculty provides technical guidance and practical support on tax practice and policy. You can sign up to the Tax Faculty's free enewsletter (TAXwire) which provides weekly updates on developments in tax.

Sign up for TAXwireJoin the Tax Faculty

More from the Tax Faculty

Latest news
Making tax digital image

Stay up to date with the latest developments in tax by signing up to the Tax Faculty's weekly e-newsletter

Practical guidance

Comprehensive support for Tax practitioners each month from the Tax Faculty and expert contributors.

Technical support
Tax Faculty image

Expert advice from the Tax Faculty's technical managers on all the developments in tax policy and practice.