Green freeports and the Scottish government’s response to the spring 2023 consultation
By Justine Riccomini, Head of Tax (Employment and Devolved Taxes)
21 June 2023
We look at the latest developments in land and buildings transaction tax (LBTT) relief within green freeport sites.
On 16 June 2023, the Scottish government presented a draft Scottish statutory instrument (SSI) to parliament. The SSI proposes granting tax relief on qualifying non-residential transactions within designated green freeport sites with effect from 1 October 2023, lasting until 30 September 2028.
While LBTT is a fully devolved Scottish tax, the designation of green freeport sites is a matter for the UK government. Currently, two sites in Scotland have been designated as green freeports – these are:
- Cromarty Firth
- Firth of Forth
The proposal is now awaiting approval by Scottish ministers.
The consultation document made it clear that either full or partial LBTT ‘will be available where a buyer, or buyers, enter into a qualifying land transaction in which the relevant land or property is situated within a designated green freeport tax site and is used, or is intended to be used, in a qualifying manner’.
To prevent jurisdictional tax competition, it is anticipated that the LBTT relief offering will be similar to the stamp duty land tax (SDLT) reliefs available under the English freeports regime, with Revenue Scotland administering those reliefs.
In addition, the Scottish government also released its response to the consultation issued on 17 March 2023 which concluded on 12 May 2023. The response covers off the areas (and rationale) where the draft SSI has been amended and where it has been left as it was previously.
ICAS has attended a series of meetings with the Scottish government to discuss the mechanics, consequences and practicalities of this matter with other stakeholders, and represent our members’ interests.
If you wish to contribute to the debate…why not join an ICAS tax committee and bring your expertise straight to the Tax Team?