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SDLT and transition to devolved taxes

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HMRC has published guidance on the transitional rules for Welsh land transaction tax (LTT) following the change from SDLT in Wales on 1 April 2018. Under these rules, SDLT will continue to apply to transactions relating to or including land in Wales where the effective date is on or after 1 April 2018 and the transaction is either:

  • effected in pursuance of a contract entered into and substantially performed on or before 17 December 2014 (the day on which the Wales Act 2014 received royal assent); or
  • effected in pursuance of a contract entered into on or before 17 December 2014 where there was no subsequent variation, option exercise, assignment, sub-sale or similar transaction.

The guidance also covers a number of specific provisions, for which existing SDLT rules will continue to apply to the extent that the land transaction relates to land in England or Northern Ireland. Where necessary, the consideration for the transaction must be apportioned on a just and reasonable basis. See

A further specific transitional provision is contained in the Land Transaction Tax (Transitional Provisions) (Wales) (Amendment) Regulations, SI 2018/401. This concerns holdover tenancies which begin under SDLT and where the lease is renewed after 1 April 2018, then backdated. The regulations ensure that rent payable under the new lease may be reduced for LTT purposes by taxable amounts payable in respect of the holdover tenancy, even though the rent payable during holdover was chargeable to SDLT.

In addition, HMRC has issued guidance on two specific situations where more than one tax may apply to a land transaction. These include transactions where:

  • a single amount of consideration is given for property interests in more than one UK jurisdiction; or
  • a single property incorporates land situated on both sides of a border.

In either case, the consideration would have to be apportioned between SDLT, LBTT, or LTT on a just and reasonable basis. See

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