Landmark Tribunal decision opens up potential for LBTT repayments: What this means for commercial property tenants

The First-tier Tribunal for Scotland Tax Chamber handed down a landmark decision in the case of Archer v Revenue Scotland [2025] FTSTC 10 on 10 July 2025, a case in which we acted for Archer.

 In granting the appeal, the Tribunal has now clarified a key issue relating to the application of Land and Buildings Transaction Tax (LBTT) to commercial leases in Scotland. 

What does it mean?

The decision has wide-reaching implications, potentially offering a pathway for businesses and tenants to claim refunds for overpaid LBTT where a commercial property lease in Scotland entered into before 1 April 2015 has been extended via a minute of extension.

In addition, the decision is likely to impact the way variations of pre-1 April 2015 are effected, with tenants likely to prefer to extend leases by minute of variation rather than by surrendering the previous lease and entering into a new one.

Case facts

The appellant, Archer (UK) Limited (Archer) entered into a lease of a property in Aberdeen in January 2014 and the date of entry was December 2013. The lease was therefore subject to the previous Stamp Duty Land Tax (SDLT) regime and not LBTT. The initial ish (Scots law term for the date that a lease expires) was 16 December 2033. A Minute of Variation was entered into in July 2020, subject to which the lease was varied to extend its term to December 2038.

The Minute took the form of variation, rather than a termination of the existing lease and a new lease being entered into in its place.  There was some debate between Archer and Revenue Scotland on how any LBTT should be calculated.  Revenue Scotland ultimately issued a closure notice to Archer in August 2023, treating the Minute as the creation of a new lease for LBTT purposes for a period of 5 years commencing on 17 December 2033, the day after expiry of the existing lease.

Decision and impact

Deciding in favour of Archer, the Tribunal confirmed that where a pre-1 April 2015 Scottish lease originating under SDLT is extended by a minute of variation, a new LBTT lease is not deemed to be created for LBTT purposes. This means that no LBTT was payable on the extension of the lease.

The Tribunal decision provides welcome clarity for business and tenants and opens up potential avenues for reclaiming LBTT that was potentially overpaid. Property holders and tenants should consider reviewing their historic lease arrangements to assess whether any LBTT has been paid on the extension of any pre-1 April 2015 leases.

Routes for repayment will depend on when the pre-1 April 2015 lease was extended.  If an LBTT return was made and LBTT paid within the last five years, an overpayment relief claim could potentially be claimed, with older returns requiring an out of time claim with Revenue Scotland.  Expert advice should be always be sought.

Revenue Scotland have yet to indicate whether they plan to appeal the decision.

For advice or further information, please contact any member of the Burness Paull Tax and Incentives Team, Peter Chambers (Head of Real Estate) or your usual Real Estate contact.

Acting for Archer (the appellant), the Burness Paull tax team was led by Christine Yuill (Partner and Head of Tax and Share Incentives) and Charlie Fletcher (Senior Solicitor, Tax and Share Incentives), with previous support from Ronnie Brown (former Head of Tax and Share Incentives at Burness Paull LLP). The team instructed Philip Simpson KC (Terra Firma Chambers)

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