Question

Olivia wants to buy a new house in Scotland.

She knows that Land and Building Transaction Tax will be added to the price
of the house.
Land and Building Transaction Tax rates are shown below:
pay nothing on the first £145 000 of the price of the house,
pay 2% on the part of the price of the house that is above £145 000 and
up to and including £250 000,
pay 5% on the part of the price of the house that is above £250 000 and
up to and including £325 000,
pay 10% on the part of the price of the house that is above £325 000 and
up to and including £750 000.
Find the Land and Building Transaction Tax payable on a house costing £544
000.

Answer 1

£27,750

Explanation:

See the attached spreadsheet.

The top row shows the range and tax rate for the home value. (e.g., From £145,000 to £250,000), the tax rate is 2%).

The second row shows the the total tax for that range if the sales value is over £145,000 but below £250,000.

This is done for each column until the value of the house is covered. The blue box is the value that remains on the house, and it is covered by the 10% tax.

The tax for each segment is shown on the third row, with the sum of the taxes on the far right, in green.

The sum of the taxable segments sums to the value of the house (in yellow), as it should.