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The Land Transaction Tax (Tax Bands and Tax Rates) (Wales) Regulations 2018

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Welsh Statutory Instruments

2018 No. 128 (W. 32)

Land Transaction Tax, Wales

The Land Transaction Tax (Tax Bands and Tax Rates) (Wales) Regulations 2018

Made

31 January 2018

Coming into force

1 April 2018

The Welsh Ministers make the following Regulations in exercise of the powers conferred on them by section 24(1) of, and paragraph 28(1) of Schedule 6 to, the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017(1).

In accordance with section 25(1) of that Act, a draft of these Regulations was laid before and approved by a resolution of the National Assembly for Wales.

Title and commencement

1.—(1) The title of these Regulations is the Land Transaction Tax (Tax Bands and Tax Rates) (Wales) Regulations 2018.

(2) These Regulations come into force on 1 April 2018.

Application

2.  These Regulations have effect in relation to any chargeable transaction(2) with an effective date on or after 1 April 2018.

Tax bands and percentage tax rates

3.  The Schedule to these Regulations specifies the tax bands and percentage tax rates for the purposes of section 24(1) of, and paragraph 28(1) of Schedule 6 to, the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017—

(a)Table 1 specifies the tax bands and percentage tax rates for each band for residential property transactions;

(b)Table 2 specifies the tax bands and percentage tax rates for each band for higher rates residential property transactions;

(c)Table 3 specifies the tax bands and percentage tax rates for each band for non-residential property transactions; and

(d)Table 4 specifies the tax bands and percentage tax rates for each band for transactions where the chargeable consideration consists of rent.

Mark Drakeford

Cabinet Secretary for Finance, one of the Welsh Ministers

31 January 2018

Regulation 3

SCHEDULE

Table 1: Residential property transactions

Tax bandRelevant considerationPercentage tax rate
Zero rate bandNot more than £180,0000%
First tax bandMore than £180,000 but not more than £250,0003.5%
Second tax bandMore than £250,000 but not more than £400,0005%
Third tax bandMore than £400,000 but not more than £750,0007.5%
Fourth tax bandMore than £750,000 but not more than £1,500,00010%
Fifth tax bandMore than £1,500,00012%

Table 2: Higher rates residential property transactions

Tax bandRelevant considerationPercentage tax rate
First tax bandNot more than £180,0003%
Second tax bandMore than £180,000 but not more than £250,0006.5%
Third tax bandMore than £250,000 but not more than £400,0008%
Fourth tax bandMore than £400,000 but not more than £750,00010.5%
Fifth tax bandMore than £750,000 but not more than £1,500,00013%
Sixth tax bandMore than £1,500,00015%

Table 3: Non-residential property transactions

Tax bandRelevant considerationPercentage tax rate
Zero rate bandNot more than £150,0000%
First tax bandMore than £150,000 but not more than £250,0001%
Second tax bandMore than £250,000 but not more than £1,000,0005%
Third tax bandMore than £1,000,0006%

Table 4: Chargeable consideration which consists of rent

Tax bandRelevant considerationPercentage tax rate
NRL zero rate bandNot more than £150,0000%
First tax bandMore than £150,000 but not more than £2,000,0001%
Second tax bandMore than £2,000,0002%

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations specify the first tax bands and percentage tax rates for land transaction tax, which is introduced by the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (“the LTT Act”).

The tax bands and percentage tax rates in these Regulations have effect in relation to chargeable transactions with an effective date on or after 1 April 2018.

Separate tax bands and percentage tax rates apply to:

  • Residential property transactions (Table 1);

  • Higher rates residential property transactions (Table 2);

  • Non-residential property transactions (Table 3); and

  • Chargeable consideration which consists of rent (and therefore which is only relevant in the case of leases) (Table 4).

Tax is to be calculated in accordance with sections 27 and 28 of the LTT Act except where the chargeable consideration consists of rent. In these cases, tax is to be calculated in accordance with Part 5 of Schedule 6 to the LTT Act.

By virtue of section 24(8) of the LTT Act, transactions involving a mixture of residential and non-residential property are to be treated as non-residential property transactions (and the tax bands and percentage tax rates in Table 3 apply).

The Welsh Ministers’ Code of Practice on the carrying out of Regulatory Impact Assessments was considered in relation to these Regulations. As a result, a Regulatory Impact Assessment has been prepared as to the likely costs and benefits of complying with these Regulations. A copy can be obtained from the Welsh Government, Cathays Park, Cardiff CF10 3NQ.

(1)

2017 anaw 1.

(2)

See section 17 of the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 for the definition of “chargeable transaction”.

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