From 1 April 2026, Scotland will exempt the creation, issue, transfer, redemption and cancellation of units in co‑ownership authorised contractual schemes (CoACS) from Land and Buildings Transaction Tax. The Scottish Government’s policy note frames the change as removing investor‑level LBTT where scheme assets remain within the fund. (legislation.gov.uk)

The regulations insert a new paragraph 7A into schedule 1 of the Land and Buildings Transaction Tax (Scotland) Act 2013. A CoACS is a UK‑authorised, contract‑based collective investment vehicle under the Financial Services and Markets Act 2000; investors hold ‘units’ issued by an authorised operator and overseen by a depositary. (legislation.gov.uk)

The carve‑out is specific. It does not cover a fund’s acquisition of Scottish land or property, so LBTT still applies when a CoACS buys assets; the exemption is solely for unit‑level transactions. That design is explicit in the Finance and Public Administration Committee’s summary. (parliament.scot)

Holyrood approved the instrument on 18 February 2026 via motion S6M‑20827 after a short debate, with MSPs voting 112–7 in favour and one abstention. The regulations then moved to commence on 1 April 2026. (parliament.scot)

The committee report says the intention is to support investment in Scottish land and property through CoACS. The Scottish Fiscal Commission assessed the revenue effect as negligible, reflecting a policy designed to be broadly tax‑neutral. (parliament.scot)

For managers and allocators, the practical difference is that secondary trades in units stop behaving like land deals. Under previous LBTT rules, exchanges of CoACS units could be treated as land transactions because the scheme directly owned property; the Scottish Government’s 2018 consultation set out that friction and proposed mirroring the SDLT approach. (gov.scot)

England and Northern Ireland already keep SDLT at the fund‑level purchase while treating investor rights in CoACS as akin to company shares, so unit trades sit outside SDLT. Scotland’s move largely closes that structural gap. (gov.uk)

Expect cleaner liquidity for real estate funds using CoACS. Entry and exit can be priced without an LBTT overlay on unit trades, improving turnover for pension funds, insurers and long‑income strategies, while leaving LBTT squarely on the fund’s property acquisitions.

Timing is the near‑term decision point. Transactions completing on or after 1 April 2026 benefit; managers may wish to synchronise subscriptions, redemptions and internal rebalances with that date and update offering documents and investor communications accordingly. (legislation.gov.uk)

Related reforms remain open. Ministers have yet to legislate for LBTT reliefs on Reserved Investor Funds or for ‘seeding’ assets into PAIFs and CoACS-areas where SDLT already offers reliefs-though officials signalled further work after last year’s consultation. (kpmg.com)

Not everyone is enthusiastic. In the chamber, Green MSPs warned against a pattern of LBTT exemptions linked to investment vehicles; ministers argued the change removes an investor‑level anomaly to attract pooled capital. The broader LBTT review is still expected later this term. (parliament.scot)

Bottom line for investors: Scotland is bringing the tax handling of CoACS units into line with market practice elsewhere in the UK. Secondary trades get simpler; buying the building remains where LBTT applies.