Tax delay ‘may harm economy’

Businesses and professional bodies warned that uncertainty over John Swinney’s plans to replace stamp duty with a new transaction tax might deter investors from coming to Scotland.

Responses to the Scottish Government consultation on the tax system change said a delay in setting rates for the Lands and Buildings Transaction Tax (LBTT) might discourage investment and the wealthy from settling in Scotland.

The Scottish Government argues the transaction tax is fairer because it will be more closely related to an individual’s ability to pay and more directly linked to a property’s value than the traditional stamp duty.

But the consultation responses, published last night, revealed that law firm Brodies concedes ministers would prefer not to announce the rates for LBTT before April 2015, but went on: “We understand that analysts are finding it difficult to establish the current position in relation to LBTT, and this is likely to act as a disincentive to investment in Scotland.”

Concern was also expressed by British Land Company, whose assets include the Fort Kinnaird shopping centre outside Edinburgh, Dundee’s Tesco and the Bon Accord and St Nicholas shopping centres in Aberdeen.