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

PART 4 E+W BUYER IS NOT AN INDIVIDUAL

Modifications etc. (not altering text)

C1 Sch. 5 applied (with modifications) (1.4.2018) by The Land Transaction Tax (Transitional Provisions) (Wales) Regulations 2018 (S.I. 2018/126), regs. 1(2), 12

Introductory E+W

19 E+W This Part sets out when a chargeable transaction where the buyer is not an individual is a ““higher rates residential property transaction”” for the purpose of regulations under section 24(1)(b).

Commencement Information

I1 Sch. 5 para. 19 in force at 1.4.2018 by S.I. 2018/34, art. 3

Transaction involving a dwelling E+W

20 (1) A chargeable transaction is a higher rates residential property transaction if— E+W

(a) the buyer is not an individual,

(b) the main subject-matter of the transaction consists of a major interest in a dwelling (““the purchased dwelling””), and

(c) the chargeable consideration for the dwelling is £40,000 or more.

[F1 (1A) Sub-paragraph (1) applies subject to the exceptions in—

(a) sub-paragraph (2), and

(b) paragraph 20A (subsequent disposal to local authorities exception).]

(2) F2 ... A transaction is not a higher rates residential property transaction under sub-paragraph (1) if at the end of the day that is the effective date of the transaction—

(a) the purchased dwelling is subject to a lease,

(b) the main subject-matter of the transaction is reversionary on that lease, and

(c) the lease meets the conditions set out in sub-paragraph (3).

(3) The conditions are that—

(a) the lease is not held by a person connected with the buyer, and

(b) the lease has an unexpired term of more than 21 years.

Textual Amendments

F1 Sch. 5 para. 20(1A) inserted (13.2.2026) by The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (Amendments to Schedule 5) Regulations 2026 (W.S.I. 2026/42), regs. 1(2), 4(2)(a)

F2 Word in Sch. 5 para. 20(2) omitted (13.2.2026) by virtue of The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (Amendments to Schedule 5) Regulations 2026 (W.S.I. 2026/42), regs. 1(2), 4(2)(b)

Commencement Information

I2 Sch. 5 para. 20 in force at 1.4.2018 by S.I. 2018/34, art. 3

[F3 Subsequent disposal to local authorities exception: transaction involving a dwelling E+W

Textual Amendments

F3 Sch. 5 para. 20A and cross-heading inserted (13.2.2026) by The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (Amendments to Schedule 5) Regulations 2026 (W.S.I. 2026/42), regs. 1(2), 4(3)

20A (1) This paragraph applies to a transaction (“the acquisition transaction”)— E+W

(a) that is a higher rates residential property transaction under paragraph 20,

(b) the effective date of which is during the period beginning with 13 February 2026 and ending with 31 March 2031, and

(c) the chargeable consideration for which is £400,000 or less.

(2) The acquisition transaction ceases to be a higher rates residential property transaction under paragraph 20 if—

(a) in another transaction (“the disposal transaction”) the buyer in the acquisition transaction grants a lease of the purchased dwelling (“the leased dwelling”) to a local authority,

(b) the lease is for a term of at least 5 years but not more than 20 years,

(c) the rent payable under the lease is no greater than the maximum local housing allowance applicable at the effective date of the disposal transaction in respect of the leased dwelling, and

(d) the effective date of the disposal transaction is during the period of 18 months beginning with the effective date of the acquisition transaction.

(3) If the lease granted in the disposal transaction is terminated by the buyer in the acquisition transaction before the 5^th anniversary of the effective date of the disposal transaction, sub-paragraph (2) is treated as if it never applied to the acquisition transaction.

(4) For further provision in connection with—

(a) a transaction to which sub-paragraph (2) applies, see paragraph 23A;

(b) a transaction to which sub-paragraph (3) applies, see paragraph 23B.

(5) For the purposes of sub-paragraph (2), paragraph 20(1) of Schedule 6 (agreement for lease that is substantially performed is treated as a grant of a lease) does not apply.]

Transaction involving multiple dwellings E+W

21 (1) A chargeable transaction is a higher rates residential property transaction if— E+W

(a) the buyer is not an individual,

(b) the main subject-matter of the transaction consists of a major interest in two or more dwellings (““the purchased dwellings””), and

(c) at least one of the purchased dwellings is a dwelling to which sub-paragraph (2) applies.

(2) This sub-paragraph applies to a purchased dwelling if the amount of the chargeable consideration for the transaction which is attributable on a just and reasonable basis to the purchased dwelling is £40,000 or more.

(3) But sub-paragraph (2) does not apply to a purchased dwelling if at the end of the day that is the effective date of the transaction—

(a) the purchased dwelling is subject to a lease,

(b) the main subject-matter of the transaction is reversionary on that lease, and

(c) the lease meets the conditions set out in sub-paragraph (4).

(4) The conditions are that—

(a) the lease is not held by a person connected with the buyer, and

(b) the lease has an unexpired term of more than 21 years.

(5) A transaction within section 72(9) is not a higher rates residential property transaction save where Schedule 13 applies (see in particular paragraph 6(6) of that Schedule).

[F4 (5A) This paragraph applies subject to paragraph 21A (subsequent disposal to local authorities exception).]

Textual Amendments

F4 Sch. 5 para. 21(5A) inserted (13.2.2026) by The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (Amendments to Schedule 5) Regulations 2026 (W.S.I. 2026/42), regs. 1(2), 4(4)

Commencement Information

I3 Sch. 5 para. 21 in force at 1.4.2018 by S.I. 2018/34, art. 3

[F5 Subsequent disposal to local authorities exception: transaction involving multiple dwellings E+W

Textual Amendments

F5 Sch. 5 para. 21A and cross-heading inserted (13.2.2026) by The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (Amendments to Schedule 5) Regulations 2026 (W.S.I. 2026/42), regs. 1(2), 4(5)

21A (1) This paragraph applies to a transaction (“the acquisition transaction”)— E+W

(a) that is a higher rates residential property transaction under paragraph 21, and

(b) the effective date of which is during the period beginning with 13 February 2026 and ending with 31 March 2031.

(2) Sub-paragraph (4) applies to the acquisition transaction if—

(a) in another transaction (“the disposal transaction”) the buyer in the acquisition transaction grants a lease of one or more of the purchased dwellings that consisted of the main subject-matter of the acquisition transaction (“leased dwelling”) to a local authority,

(b) the chargeable consideration attributable to the leased dwelling or each leased dwelling (as the case may be) is £400,000 or less,

(c) the lease is for a term of at least 5 years but not more than 20 years,

(d) the rent payable under the lease is no greater than the maximum local housing allowance applicable at the effective date of the disposal transaction in respect of the leased dwelling or each leased dwelling (as the case may be), and

(e) the effective date of the disposal transaction is during the period of 18 months beginning with the effective date of the acquisition transaction.

(3) For the purpose of sub-paragraph (2)(b), the chargeable consideration attributable to a leased dwelling is so much of the chargeable consideration for the acquisition transaction that is attributable, on a just and reasonable basis, to the interest in that leased dwelling.

(4) The tax chargeable in respect of the acquisition transaction is reduced by the relevant amount.

(5) If the disposal transaction is the grant of a lease of a single leased dwelling, the “relevant amount” is the difference between—

(a) the tax that would have been chargeable under section 27 in respect of the interest in the leased dwelling had it been the main subject-matter of a separate chargeable transaction (“the notional transaction”) that was a higher rates residential property transaction for the purposes of regulations under section 24(1)(b), and

(b) the tax that would have been chargeable under section 27 on the same notional transaction were it a residential property transaction for the purposes of regulations under section 24(1)(a).

(6) If the disposal transaction is the grant of a lease of more than one leased dwelling, the “relevant amount” is the difference between—

(a) the sum of the amounts of tax that would have been chargeable under section 27 in respect of the interest in each leased dwelling had each interest been the main subject-matter of separate chargeable transactions (“the notional transactions”) and each notional transaction were a higher rates residential property transaction for the purposes of regulations under section 24(1)(b), and

(b) the sum of the amounts of tax that would have been chargeable under section 27 on the same notional transactions were they residential property transactions for the purposes of regulations under section 24(1)(a).

(7) For the purposes of determining the tax that would have been chargeable under sub-paragraphs (5)(a) and (5)(b) or (6)(a) and (6)(b) (as the case may be), the chargeable consideration for a notional transaction is the amount determined under sub-paragraph (3) in respect of the leased dwelling the interest in which is treated as being the main subject-matter of the notional transaction.

(8) If the lease granted in the disposal transaction is terminated by the buyer in the acquisition transaction before the 5^th anniversary of the effective date of the disposal transaction, sub-paragraph (4) is treated as if it never applied to the acquisition transaction.

(9) For further provision in connection with—

(a) a transaction to which sub-paragraph (4) applies, see paragraph 23A;

(b) a transaction to which sub-paragraph (8) applies, see paragraph 23B.

(10) For the purposes of sub-paragraph (2), paragraph 20(1) of Schedule 6 (agreement for lease that is substantially performed is treated as a grant of a lease) does not apply.]

Two or more buyers E+W

22 E+W Where there are two or more buyers in a transaction, the transaction is a higher rates residential property transaction if paragraph 20 or 21 applies in relation to any one of the buyers.

Commencement Information

I4 Sch. 5 para. 22 in force at 1.4.2018 by S.I. 2018/34, art. 3