Scotland will exempt dealings in units of co‑ownership authorised contractual schemes (CoACS) from Land and Buildings Transaction Tax (LBTT) with effect from 1 April 2026. The Scottish Parliament approved the affirmative regulations on 18 February 2026, inserting a new paragraph 7A into Schedule 1 of the Land and Buildings Transaction Tax (Scotland) Act 2013 to create the exemption. (parliament.scot)
The exemption covers investor‑level unit transactions in a CoACS. In practice, this means the creation, issue, transfer, redemption or cancellation of units will be outside LBTT from the commencement date. (kpmg.com)
The regulations apply where the fund is a co‑ownership scheme authorised under the Financial Services and Markets Act 2000 by an authorisation order made under section 261D(1). Co‑ownership contractual schemes are defined in FSMA section 235A, and are FCA‑authorised contractual funds in which participants hold units representing their interests. (legislation.gov.uk)
The change is tightly drawn. It does not exempt the acquisition by a CoACS of a chargeable interest in Scottish land: purchases by the scheme itself remain subject to LBTT on the usual basis. The policy materials make clear the intention is to relieve investor‑level unit transactions only. (legislation.gov.uk)
For compliance teams, the classification of these unit transactions as exempt means they are not notifiable to Revenue Scotland. By contrast, any acquisition of land or other chargeable interests by the scheme will continue to be notifiable where statutory thresholds are met. (revenue.scot)
According to the Scottish Government’s Policy Note, the objective is to support investment in Scottish land and property held through CoACS structures and to remove administrative friction where there is no change in scheme‑level ownership of the underlying assets. The instrument proceeds by affirmative procedure. (legislation.gov.uk)
The measure also aligns Scotland’s approach with established Stamp Duty Land Tax treatment in England and Northern Ireland, where trading in CoACS units does not give rise to SDLT while property acquisitions by the fund remain chargeable. (gov.uk)
The Scottish Fiscal Commission has assessed the measure and, given the policy’s intended tax neutrality at investor level, judges the effect on LBTT revenues to be negligible. (fiscalcommission.scot)
Parliamentary scrutiny steps were completed before the instrument was made: the Delegated Powers and Law Reform Committee made no recommendations; the Finance and Public Administration Committee recommended approval; and the Parliament approved the draft on 18 February 2026. (parliament.scot)
Operationally, fund operators, depositaries and advisers should confirm that their schemes are FCA‑authorised CoACS, update transaction workflows so that unit subscriptions and redemptions effective on or after 1 April 2026 are treated as LBTT‑exempt, and continue to apply standard LBTT rules to any Scottish property acquisitions by the scheme. (legislation.gov.uk)