A new Bill introduced by The Welsh Government will have a number of implications for those buying or selling properties in certain parts of the UK – and for their conveyancers.
Forecast to be introduced in April 2018, the new Land Transaction Tax and Anti-avoidance of Devolved Taxes Bill will see Stamp Duty Land Tax (SDLT) replaced by an all-new Land Transaction Tax (LTT) in Wales.
To add further confusion, LTT will be collected by a new ‘Welsh Revenue Authority’, as opposed to HM Revenue & Customs (HMRC).
The tax, which will be payable upon purchase (or lease) of building or land over a certain price, will bring with it a number of changes, particularly in terms of residential leases.
According to reports, a rent element of new residential leases been added to the Bill which, in some cases, will be exempt from tax under LTT, in a bid to simplify the tax and reduce the administrative burdens involved.
However, institutional investors and housebuilders holding property portfolios which span across the whole of the UK will now arguably face greater administrative and compliance burdens in the form of three separate systems of UK land transaction taxes for themselves and their conveyancers to tackle during cross-jurisdiction transactions.
However, on the upside, The Welsh Government has said that the UK’s additional three per cent SDLT surcharge recently imposed upon buy-to-let investors may not form part of LTT legislation.
Reports have suggested that LTT’s adoption of the surcharge, currently payable on purchases of second homes in the UK, is ‘under consideration’ until further notice.
The Welsh Government’s statement regarding the Land Transaction Tax and Anti-avoidance of Devolved Taxes Bill can be found here: http://gov.wales/funding/fiscal-reform/welsh-taxes/land-transaction-tax/?lang=en