Scottish Commercial Leases and Stamp Tax: What Business Owners Need to Know

If you lease commercial property in Scotland, there’s a good chance stamp tax applies - even if you’ve never been told about it.

This is one of the most common areas we see Scottish business owners caught out. Many assume stamp duty is only relevant when buying property. In Scotland, commercial leases can also trigger tax obligations.

How stamp tax on Scottish leases works

Commercial lease tax in Scotland is administered by Revenue Scotland.

The amount due depends on factors such as:

• Lease length
• Rent levels
• Rent increases
• Variations or extensions

It isn’t just about the original lease. New obligations often arise even where no changes to the lease are made.

Why businesses often miss this tax

There are a few key reasons this tax is frequently overlooked:

• It’s dealt with at the start and never revisited
• Lease changes aren’t reviewed for tax impact
• Responsibility between advisers is unclear
• Rules are complex and often misunderstood by advisors

Once the lease is signed, many businesses assume everything is finished. That’s rarely the case.

Where leases can trigger additional tax

Tax exposure can arise when:

• Rent increases
• Lease terms are extended
• Agreements are varied
• Break clauses are amended
• There are no changes at all

These changes don’t always exist and rarely feel significant, but they can affect the tax position.

What happens if the tax is missed?

If stamp tax on a lease is missed or dealt with incorrectly, the business may later face:

• Additional tax
• Interest
• Penalties

Often, this only comes to light years later when records are reviewed or issues are flagged.

Why a risk assessment is worthwhile

A lease risk assessment can:

• Confirm whether tax applied
• Check whether it was calculated correctly
• Identify any risk exposure
• Give you clarity on next steps

We offer free risk assessments so businesses can understand their position without committing to anything upfront.

FAQs

Does this apply to all Scottish commercial leases?
In theory no, but in practice yes. It depends on the lease terms and value.

Can historic leases be reviewed?
Yes. In fact, older leases are often where problems sit unnoticed. Particularly where the lease acquired is not the first grant of a lease.

Is this something landlords deal with?
No. Liability sits with the tenant, which surprises many businesses.

If you lease commercial property in Scotland and haven’t actively reviewed the stamp tax position, it’s worth doing. It’s far better to identify issues early than be caught out later.