Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017

Shared ownership lease: election for market value treatment

3 (1) This paragraph applies where—

(a) a lease is granted—

(i) by a qualifying body, or

(ii) in pursuance of the preserved right to buy,

(b) the conditions in sub-paragraph (2) are met, and

(c) the buyer elects for tax to be charged in accordance with this paragraph.

(2) The conditions are—

(a) that the lease must be of a dwelling;

(b) that the lease must give the tenant exclusive use of the dwelling;

(c) that the lease must provide for the tenant to acquire the reversion;

(d) that the lease must be granted partly in consideration of rent and partly in consideration of a premium calculated by reference to—

(i) the market value of the dwelling, or

(ii) a sum calculated by reference to that value;

(e) that the lease must contain a statement of—

(i) the market value of the dwelling, or

(ii) the sum calculated by reference to that value,

by reference to which the premium is calculated.

(3) An election for tax to be charged under this paragraph—

(a) must be included in the return made in respect of the grant of the lease (or in an amendment to that return), and

(b) is irrevocable, so that the return may not be amended so as to withdraw the election.

(4) Where this paragraph applies the chargeable consideration for the grant of the lease is taken to be the amount stated in the lease in accordance with sub-paragraph (2)(e)(i) or (ii).

(5) Where this paragraph applies no account is taken for the purposes of land transaction tax of the rent mentioned in sub-paragraph (2)(d).

(6) Section 70 (meaning of market value) does not apply to this paragraph.