Scottish Ministers have legislated to exempt specified investor‑level transactions in Co‑ownership Authorised Contractual Schemes (CoACS) from Land and Buildings Transaction Tax (LBTT) with effect from 1 April 2026. The Regulations amend schedule 1 of the LBTT (Scotland) Act 2013 by inserting a new paragraph 7A so that the creation, issue, transfer, redemption and cancellation of CoACS units are treated as exempt, while clarifying that the exemption does not extend to a scheme’s purchase of land or property. (legislation.gov.uk)
The instrument proceeds under the affirmative procedure. The Delegated Powers and Law Reform Committee reported no technical points on the draft, and the Finance and Public Administration Committee took evidence from the Minister for Public Finance before recommending approval. Parliamentary time was then scheduled for the approval motion on 18 February 2026. (parliament.scot)
For scope, a “co‑ownership authorised contractual scheme” is a co‑ownership scheme authorised by the Financial Conduct Authority via an authorisation order under section 261D(1) of the Financial Services and Markets Act 2000. “Co‑ownership scheme” has the meaning in section 235A FSMA 2000, and “units” takes the meaning in section 237. The relief therefore applies to FCA‑authorised CoACS unit transactions only. (legislation.gov.uk)
The Scottish Government’s Policy Note states the objective is to support investment in Scottish land and property by ensuring investor‑level unit transactions are LBTT‑neutral and do not create tax or administrative burdens where there is no change in the scheme’s ownership of underlying assets. (legislation.gov.uk)
The approach aligns LBTT with the position under Stamp Duty Land Tax (SDLT) in England and Northern Ireland, where Finance Act 2016 introduced section 102A FA 2003 to remove SDLT on exchanges of rights in CoACS units. The Scottish Government consulted in 2025 on delivering similar treatment under LBTT. (gov.scot)
What remains taxable is unchanged: when a CoACS acquires chargeable interests in Scottish land or property, LBTT applies under the existing residential and non‑residential rules; the new exemption does not extend to those acquisitions. Practitioners should continue to apply prevailing rates and bands to underlying property purchases. (legislation.gov.uk)
From a compliance perspective, exempt transactions are not notifiable to Revenue Scotland, so investor‑level CoACS unit transactions covered by paragraph 7A should not require LBTT returns from 1 April 2026. Acquisitions of land or property by the scheme continue to be notifiable and chargeable where no other relief applies. (revenue.scot)
The Scottish Fiscal Commission (SFC) judges the measure to have a negligible effect on LBTT receipts, consistent with the policy intention of tax neutrality at investor level. In its January 2026 forecasts, the SFC projects LBTT revenue of £1.049 billion for 2026‑27. (fiscalcommission.scot)
For fund operators and advisers, immediate actions include confirming that affected vehicles are FCA‑authorised CoACS under FSMA 2000, updating transaction templates and client materials for unit creations and redemptions taking effect on or after 1 April 2026, and maintaining standard LBTT processes for any underlying property purchases by the scheme.
In summary, the Regulations come into force on 1 April 2026 and create a targeted exemption for the creation, issue, transfer, redemption and cancellation of units in an FCA‑authorised CoACS. They do not alter LBTT liabilities on acquisitions of chargeable interests in land by such schemes. (legislation.gov.uk)