The Land Transaction Tax (Temporary Variation of Rates and Bands for Residential Property Transactions) (Wales) Regulations 2020

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Land Transaction Tax (Tax Bands and Tax Rates) (Wales) Regulations 2018 (S.I. 2018/128 (W. 32)) (“the 2018 Regulations”) to provide for a temporary variation to the tax bands and percentage tax rates of land transaction tax applicable to certain residential property transactions.

Regulation 2 applies the temporary variation to residential property transactions with an effective date on or after 27 July 2020, but before 1 April 2021. Where a contract is substantially performed before 1 April 2021, but completion takes place on or after that date, no additional tax will be chargeable by virtue of section 10 of the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (“the LTT Act”) as long as the only reason additional tax is chargeable is because completion has occurred on or after that date.

A chargeable transaction is a residential property transaction if it falls within the description contained in section 24(6) of the LTT Act.

Regulation 3 specifies the tax bands and percentage tax rates applicable to those transactions specified by regulation 2.

The 2018 Regulations continue to make provision for the tax rates and tax bands applicable to chargeable transactions which—

(a) do not fall within the description of a residential property transaction, or

(b) take place before 27 July 2020 or on or after 1 April 2021.

Tax is to be calculated in accordance with sections 27 and 28 of the LTT Act.

The Welsh Ministers’ Code of Practice on the carrying out of Regulatory Impact Assessments was considered in relation to these Regulations. As a result, a Regulatory Impact Assessment has been prepared as to the likely costs and benefits of complying with these Regulations. A copy can be obtained from the Welsh Government, Cathays Park, Cardiff, CF10 3NQ.