Am I liable to pay ADS?
You may have heard about the introduction, by the Scottish Government on 1st April 2016, of a new tax called Additional Dwelling Supplement (ADS), which is addition an to the existing Land and Building Transaction Tax (Stamp Duty) already in place. This conincides with the introduction of a simlar tax in the rest of the UK.
Unfortunately some people have characterised this new tax as one of the following statements.
I am purchasing a new property as a Buy to Let or Second Home and that means I will be liable to pay ADS
OR
I am not purchasing a new property as a Buy to Let or Second Home and that means I will not be liable to pay ADS.
However, the way the legislation has been formed makes it a lot more complicated.
You may already be aware that you will be liable to pay ADS and have included this cost in your budget calculations but it may be that you are unsure whether you are liable or not. We have therefore put together this ADS Help App, which on the majority of cases, will let you know immediately and free of charge whether you are liable or not. However in some circumstances it might not be so easy to determine liability and we would therefore require to perform an Expert Review on your behalf. Unfortunately as there is meaningful work involved in providing an Expert Review then we would need to make a charge for this service of £75.00 plus VAT. You are, of course, under no obligation to use this service and we have made it available to provide transparency over costs and as a service if you are concerned.
Why is the ADS law so complicated?
When new laws are introduced, whether or not they are believed to be reasonable, the effectiveness of the new law is the ease with which it can be implemented and understood. On this measurement the new additional land tax ADS does not rank highly. In an effort to make it difficult to avoid, the initial material produced less than two weeks before the law came into effect was 64 pages in length and incorporated 76 examples. Generally speaking, if something needs 76 examples to explain its calculations, it can be assumed that there will be unintended consequences from its implementation.
The law has been created on a “self-assessment” basis. That means that you are responsible to get it right. We have no control over the law and our aim is to provide you with an understanding of the position. McVey and Murricane have no liability in providing these tools to assist you in assessing your tax liability. You are always free to employ a tax expert at your own cost. By completing this form, you are accepting that McVey and Murricane have no liability to you in this respect.