Tuesday 25 June was an historic day for the Scottish Parliament. A bill allowing the Scottish Government to set and collect stamp duty from the sale of properties was approved by MSPs.
And what better medium to first flex the Scottish Government's powers under the Scotland Act 2012 than by changing tax regimes?
From 15 April 2015, Stamp Duty Land Tax (SDLT) will cease to apply in Scotland and will be replaced by a progressive tax collecting system under The Land and Buildings Transaction Tax (Scotland) Bill (LBTT).
Why all the change?
It is the first time a Bill has been introduced that will allow the Scottish Government to both set and collect a proportion of its revenue; a bold move towards greater financial self-determination for Scotland.
LBTT heralds an opportunity for the Scottish Government to create a simpler and more efficient taxing system, which is more in tune with Scots property law than is presently the case with SDLT.
Criticised not least for creating a distorted market with the thresholds, the current SDLT 'slab-based' regime is fundamentally unfair; under it, if a property is just above the threshold for a higher rate of duty, tax is applied to the whole price.
Similar to the structure of UK income tax, LBTT favours a more progressive approach to charging tax whereby only the amount of the price over the relevant threshold would attract tax. Effectively, the amount of tax payable would rise more proportionately according to the amount of the price, rent or premium paid.
Inevitably, however, this will lead to increased tax for those operating at the top end of the market; will Scotland be seen as less attractive for property investment and development as opposed to elsewhere in the UK?
To alleviate concerns for those within the commercial property sector, encouragingly, the new tax proposes to have a lower top rate for commercial property compared with that for residential property (4% and 7% under current SDLT regime).
Is there anywhere to hide?
The majority of reliefs and exemptions which apply to SDLT are likely to continue. However, there are proposals to remove existing reliefs; the most contentious likely to be the proposed withdrawal of sub-sale relief. Time will tell if the Scottish Government caves in to the commercial and economic rationale and let this relief be.
SDLT has proven to be a tax avoidance haven. The Scottish Government is keen to learn from these problems and is considering imposing a general anti-avoidance rule to ensure that specific arrangements are in place uncovering tax avoidance schemes.
To oversee tax administration and collection, the Scottish Government has announced the establishment of Revenue Scotland. The Registers of Scotland (RoS), which is responsible for registering title to land in Scotland, is to develop e-registration products further to enable transactions to be submitted electronically. RoS will also develop an electronic system to receive and administer tax returns for LBTT.
The finer details remain to be resolved. Inevitably, much of the proposed tax rates and thresholds will be determined by prevailing economic circumstances and as such will only be disclosed much closer to the April 2015 start date.
But, provided that the reconciliation of tax management with current Scottish law and practices does not lessen Scotland's attractiveness to come and do business, the new proposals should be welcomed.