My client is buying five residential properties from the same seller. Three of the properties are in England but two of them are located in Wales. I am familiar with the “linked transaction” principle and understand that this is common to both taxes with similar rules, but how would this apply in this case, given the different rates and bandings in each jurisdiction?
Although Land Transaction Tax (LTT) in Wales replaced Stamp Duty Land Tax from 1 April 2018, both jurisdictions contain similar rules – which require a single calculation of tax based on the combined consideration of all the “linked transactions” where:
There is more than one transaction the transactions are between the same buyer and seller or between people connected with either of them
the transactions form part of a single scheme or arrangement, or part of a series of transactions (s.108 Finance Act 2003 for England and Northern Ireland, and s.8 LTTADA 2017 for Wales respectively).
However, a close look at the respective legislation confirms in both cases that transactions are not required to be linked across jurisdictions, with similar mutual exclusions given in each as follows:
Stamp Duty Land Tax (England and Northern Ireland)
Section 108(1A) FA 2003 – “A transaction is not a linked transaction if–
(a) the transaction relates to land in Scotland, or
(b) the transaction relates to land in Wales (whether by virtue of section 48A(2) or otherwise)”.
Land Transaction Tax (Wales)
Section 8 LTTADA 2017 – refers to a “land transaction” being “a linked transaction if it is one of a number of land transactions forming part of a single scheme, arrangement or series of transactions…”. Section 3 of the same Act defines the term “land transaction” as “an acquisition of a chargeable interest”. The term “chargeable interest” is defined at Section 4 as “and estate, interest, right or power in or over land in Wales….” This therefore excludes acquisitions of properties outside of Wales.
Although not relevant to your client on this occasion, the equivalent Scottish rules (LBTT) contain a similar exclusion from linked transactions in respect of property located outside of Scotland (s57 of LBTT(S)A 2013 refers to “transactions”, s3 “chargeable interests and s4 defines chargeable interests as “land in Scotland”).
I can therefore confirm that the transactions concerning the acquisition of property in England should not be regarded as linked-with the Welsh property acquisitions and vice versa.
In association with Croner Taxwise
Image designed by Freepik
Hi, just came across this web page. Its a brilliant illustration of how small to medium sized businesses can use Awards based advertising to get their companies ranked on the 1st page of Google. Awards programmes offer many benefits to winners. After all they bring exposure and you can share the news of your win with your employees, clients, industry peers and target market as much as you like. Additonally awards offer prestige and status, giving potential customers peace of mind that they are working with a reputable company. There are many types of awards programmes, including those that host awards ceremonies (and you pay per table), organisations that award only their members (and you pay for membership and sponsorship) and those that provide promotional materials. The latter is a great choice for those who are wary about the benefits of using corporate awards programmes because generally nominees and winners do not have to pay a penny to be a participant. Participants often receives online exposure, usually with a reach much greater than their own marketing efforts can deliver. Other free benefits can include the use of an announcement. Most participants have the option to purchase additional marketing materials to further utilise their win, if they wish to, for use in social media campaigns, on their own website, email marketing campaigns or in customer newsletters.