COVID-19 related delays mean that many homeowners in Scotland who bought a new house before selling their old home and so have paid the 4% Additional Dwelling Supplement (ADS) are struggling to meet the 18 month deadline for selling their old home so that ADS can be reclaimed. The Scottish Government has listened to the concerns of home owners about delays in the property market and has extended the 18 month time limit to 27 months.

The new rules are included in Part 4 of Schedule 4 of the Coronavirus (No 2) (Scotland) Bill which was published on 11 May 2020 :-

  • the time period for selling the former home so that ADS can be reclaimed has been extended from 18 months to 27 months;
  • the new 27 month period applies if the new house was bought (the effective date of the purchase) was between 24 Sep 2018 and 24 March 2020.

Individuals who bought a new main residence between 24 Sep 2018 and 24 March 2020 and paid ADS will now have 27 months to sell their previous main residence.

The draft legislation also gives the Scottish Government power to extend the 27 month period further, or to change the purchases which it applies to, if that is necessary for COVID-19 related reasons. The legislation is expected to be passed by the Scottish Parliament in the next week.

The extension to 27 months will help many homeowners, and flexibility to review the 27 month time period is very welcome.

ADS repayment claims

Following operational changes due to COVID-19, ADS repayment claims can now only be made online – paper claims are no longer accepted:-

  • Agents can claim through the online LBTT system, SETS
  • Taxpayers (and agents claiming more than 12 months after the filing date) can claim using the new online repayment claim form and e-mailing it to
  • The new online form can be found here

ADS can be reclaimed either by amending the return within 12 months after the filing date or by making an overpayment relief claim within 5 years of the filing date. It is worth bearing in mind that replacement of main residence relief can only be claimed where seller(s) have occupied the house which is sold as their main residence at some point in the 18 months before the purchase of the new house.

Capital Gains Tax 30 day reporting and payment

From April 6 2020, if there is capital gains tax (CGT) to pay on the sale of residential property, a return has to be submitted, and the tax paid, within 30 days of the completion of the sale. There is a CGT exemption for the sale of a house which has been used solely as the seller's main home throughout the period of ownership, and the last 9 months of ownership are ignored. But if there is a long period when the old home is not lived in before it is sold, that could mean CGT is payable and the position should be checked. Our Legal Update has further details.


Isobel d'Inverno

Director of Corporate Tax