Landmark tribunal ruling could unlock LBTT repayments for commercial lease extensions
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A decision, issued yesterday, by the First-tier Tribunal for Scotland Tax Chamber (Archer v Revenue Scotland [2025] FTSTC 10, in which Philip Simpson KC of Terra Firma Chambers acted for the appellant) has clarified a crucial point in the application of Land and Buildings Transaction Tax (LBTT) to commercial leases in Scotland.
The Tribunal confirmed that where a lease originally subject to Stamp Duty Land Tax (SDLT) – i.e. one that commenced before 1 April 2015 – is later extended by a minute of variation, this does not constitute a new lease for LBTT purposes. As a result, no LBTT is payable on the extension, and three-yearly LBTT review returns are not required.
This ruling could have wide-reaching implications, potentially opening the door to repayment claims for businesses and tenants who may have overpaid LBTT or submitted unnecessary returns following lease extensions.
Legal experts are advising commercial property stakeholders to review historic lease variations and consider whether they may be eligible for a refund or correction.
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