Well now that we have your attention!

So after 15 years of Stamp Duty Land Tax (SDLT), we are saying goodbye, at least for properties in Wales with effect from 31 March 2018. Unfortunately, as you would expect, it is not that simple.

For properties in Wales, SDLT will now be replaced with a new tax, Land Transaction Tax (LTT) which will need to be paid to the Welsh Revenue Authority (WRA) in place of HM Revenue & Customs (HMRC).

Despite, the change being upon us now, we are still waiting for a lot of the detail about how this new revenue will work in practice. In particular there is only limited guidance on any reliefs from LTT.

So what do we know so far?

Similarities to SDLT

LTT will work similarly to SDLT. The WRA will collect and administer LTT, much the same as HMRC. 

The deadline for filing the return remains 30 days from the effective date. A WRA certificate will be provided once submission of the LTT Return has been made and this needs to be sent to the Land Registry when registering your transaction. 

LTT will use many of the same definitions, including "land transactions", "chargeable interest", "effective date" and "substantial performance" as SDLT. LTT will also use the slice system and has reasonably equivalent rules on how the tax is calculated. There are however some differences to watch out for.


For purchases, there is a significant change in the rate of tax payable if the property you are purchasing is in Wales. 

Commercial rates
Price threshold LLT SDLT
£0 to £150,000 0% 0%
£150,000+ to £250,000 1% 2%
£250,000 to £1m 5% 5%
£1m+ 6% 5%

For leases with only rent payable and no premium (or deemed premium) there appears to be little difference, however in practice there will be a small change as the WRA will not (it appears) round down the tax payable to the nearest pound in the same way as HMRC.

Commercial lease rates
New present value LTT Price threshold SDLT
£0 to £150,000 0% £0 - £150,000 0%
£150,000+ to £2m 1% £150,000 - £5m 1%
£2m+ 2% £5m+ 2%

In practice, what does this mean after 1 April 2018? Well here are a few worked examples.

A freehold purchase at £1,575,000 + VAT
£84,000 £91,900


A 10 year lease at a rent of £67,000 +VAT with a 3 month rent free period
£4,992 £4,992.34

Key differences

As was the case when HMRC first introduced SDLT to replace Stamp Taxes, much of the available guidance is focussed on residential property at this stage. No doubt, more guidance will be released as the tax develops. The WRA have largely followed the rules and interpretations offered by HMRC on how SDLT is calculated but there are some subtle differences including:

  • a wider interpretation of what constitutes a linked transaction
  • a single return can be filed for linked transactions completed alongside each other
  • transfers between connected persons/companies will be treated as being at the higher of market value and the actual consideration paid subject to provisions for group relief

Transitional provisions

LTT will be payable on all transactions involving properties in Wales with an effective date on or after 1 April 2018. Regulations for transitional provisions were announced at the start of 2018.[1]

SDLT will continue to apply to the transaction if made pursuant to a contract entered into on or before 17 December 2014 (save where that contract has been varied after 17 December 2014). There must, however, be substantial performance of the contract for SDLT to be applicable.

For contracts exchanged between 17 December 2014 and 31 March 2018, unless substantial performance or completion occurred on or before 31 March 2018, the transaction will fall to be liable to LTT in place of SDLT on substantial performance/completion. 

For contracts exchanged between 17 December 2014 and 31 March 2018, where substantial performance occurred on or before 31 March 2018 but completion occurs on or after 1 April 2018, the transaction may fall to be liable to both SDLT and LTT on substantial performance and completion respectively. 

In the absence of any transitional provisions, the effective date of the transaction will be the trigger for payment of either SDLT or LTT. 

Properties in both England and Wales

Where a transaction involves properties in Wales and properties elsewhere in the UK whether as a single transaction, by way of linked transactions or in relation to a property that crosses the border, a tax return will need to be filed with both HMRC and the WRA and potentially revenue Scotland (if your transaction also includes properties in Scotland) and the purchase price apportioned on a just and reasonable basis.

This involves a detailed valuation of each parcel of land which must be carried out by the Buyer. The Valuation Office Agency have issued guidance on how to carry out this valuation. 

A note will need to be made in your return to HMRC that this is a cross border transaction. The transactions will not be linked to the extent they cross the border so both returns will benefit from the full nil rate threshold.

What next?

You can now calculate LTT payable on the Welsh Revenue website. The WRA has published some initial tax guidance and an set up an online return and payment system. This registration for this system is now available here.

[1] The Land Transaction Tax (Transitional Provisions) (Wales) Regulations 2018.