New Welsh Land Transaction Tax replaces SDLT for acquisitions in Welsh land | Fieldfisher
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New Welsh Land Transaction Tax replaces SDLT for acquisitions in Welsh land

The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 ("LTT Act") became law in May of 2017 and is the second of three statutes to establish devolved tax arrangements in Wales under the Wales Act 2014 (the other two being the Tax Collection and Management (Wales) Act 2016 and the Landfill Disposals (Wales Act) Tax Act).

Under the LTT Act, Welsh land transaction tax ("LTT") replaced stamp duty land tax ("SDLT") for acquisitions of 'chargeable interests' in Welsh land. Although it became law in May last year, this new LTT applied on and from 1 April 2018, subject to certain transitional provisions. The Welsh Revenue Authority ("WRA") has been set up to replace the HMRC and administer the collection and management of LTT and the other devolved taxes.


The LTT Act is broadly consistent with SDLT, preserving the underlying structure and key features such as a marginal tax rate structure. Like SDLT, LTT will be payable on all land transactions (residential and commercial) in Wales over a certain threshold.  However the change is not simply one of terminology or the devolution of the charge. 

The National Assembly for Wales published the new LTT rates and bands that would apply in October last year, and you can view them here.

The tax calculator now made available by the WRA is a useful tool to assess the amount of LTT payable.

Key changes to SDLT legislation

Clients should note the following differences in the LTT regime:

  • Part Wales, part English land: An acquisition of land that is partly in Wales and partly in England will be treated as two separate land transactions, apportioned between the two jurisdictions. LTT will be payable on the Wales portion, and SDLT payable on the English portion.
  • Anti-avoidance and relief targeted anti-avoidance: A general anti-avoidance ("GAAR") rule is applicable to LTT. The GAAR will enable the WRA to recover LTT that has been avoided as a result of an 'artificial' tax avoidance arrangement (rather than 'abusive' tax arrangements under SDLT legislation). A single rule prohibiting any relief from being claimed where the transaction forms part of tax avoidance arrangements has also been introduced by LTT Act (rather than the more proscriptive rules under SDLT legislation).
  • Rent, residential leases: Unlike SDLT, LTT will not be charged on the rent component of residential leases. However LTT will still be chargeable on the rent component of non-residential and mixed leases.
  • Higher rates residential property transactions: The price at which LTT becomes payable on residential property is higher for LTT than for SDLT, however tax rates increase in progressiveness going up the residential property ladder (this increased progressivity also applying in respect of non-residential property). The LTT Act sets out additional rules applying for higher rates residential property transactions that do not exist under SDLT legislation (for example specific rules apply in cases involving divorce or dissolutions of civil partnerships, in relation to the assessment of acquisitions of residential property subject to a lease, to the assessment for the higher rates tax liability to be undertaken on 'intermediate' transactions, in relation to inherited property, and to clarify the rules applying in relation to major interests). A fact sheet published by the WRA provided a good summary.

Transitional Arrangements

The new LTT generally won't apply to contracts entered into on or before 17 December 2014, however different rules apply for contracts entered prior, but substantially performed after that date, and also for contracts entered between 17 December 2014 and 1 April 2018.


The WRA has published several useful technical guidance notes on the LTT Act, which are available here.