Land Transaction Tax return guidance - About the transaction

You’ll need to select if the transaction is:

• residential (main rates and higher rates)
• non-residential
• mixed use

Further guidance on transactions subject to higher rates

You may want to use our tool to check whether a transaction is subject to the higher rate of LTT.

A: ‘Residential’ (main rates and higher rates)

If the transaction involves:

• a building that’s used or suitable for use as one or more dwellings or is in the process of being constructed or adapted for such use
• land that is, or forms part of, the garden or grounds of such a building described above
• an interest in or right over land that subsists for the benefit of such a building or its grounds (for example, a right of way to access the dwelling)

If ‘Residential (main rates and higher rates)’ is selected and the buyer is an individual, select whether this is a higher rates residential property (for example, second homes / buy to let)’ because:

• the buyer / one of the buyers already holds a major interest in another property, or
• the buyer is a limited company, or
• the transaction is subject to the higher rates for any other reason

If you’ve selected ‘No’, you’ll be able to continue to the next section and ‘main rates’ will be applied in the calculation.

If you select ‘Yes’, then ‘higher residential rates’ will be applied in the calculation. Please specify whether you envisage reclaiming the higher rate within the next 3 years on this transaction.

If ‘Residential (main rates and higher rates)’ is selected and the buyer includes an organisation, you’ll need to select whether the property includes a dwelling.

When an organisation buys a dwelling, it will normally have to pay higher rates, even if it does not own any other dwellings.

B: ‘Non-residential’ 

If the whole property does not meet the definition of 'residential' further above.

C: ‘Mixed use’

If only part of the property meets the definition of 'residential' further above.

If you’ve selected ‘Non-residential’ or ‘Mixed use’ for the previous question, you must answer this question why all or part of the property is non-residential from the list provided.

If you’ve selected ‘Other’, state the non-residential property type.

If you’ve selected ‘Higher rate residential’, you must answer this question. Under certain circumstances, you can claim back the higher rate element of the tax you paid on this transaction.

Further guidance on higher rates for purchases of residential property

If the buyer expects to claim back the higher rate element of the tax you have paid at some future point (subject to the time limits referred to in guidance), you should answer ‘Yes’.

Otherwise, answer ‘No’.

Most purchases of dwellings by non-individuals will be subject to higher rates.

The following definitions should be used to determine which reason best describes why the purchase is being made.

A: For individuals

Bridging or haven’t sold previous main residence

Select this option if the buyer intends the purchased dwelling to be their main residence but still own their current main residence.

They’ll be able to apply for a refund of the higher rate tax if:

• they dispose of their previous main residence within 3 years, and
• all relevant conditions are met as per guidance under LTTA/8120

B: For non-individuals

Trade or business use (not including buy to let or holiday let)

Select this option if the buyer intends to use the dwelling in relation to a business or trade. This does not include:

• a buy-to-let dwelling, which should be captured under ‘Buy to let Landlord’
• a holiday letting, which should be captured under ‘Buying a holiday let’

C: For all buyers

Buy-to-let landlord

Select this option if:

• the buyer intends to rent this dwelling on a fixed term or periodic contract basis, and/or
• they’ve a buy-to-let mortgage

Buying a second home or holiday home

Select this option if the buyer does not intend to use this dwelling as their main residence.

It may be:

• occupied by the owner or guests, including family and friends, on a non-commercial basis, and/or
• let on a casual basis for consideration or free of charge

Buying a holiday let

Select this option:

• if the buyer intends to let the dwelling commercially as a holiday or short term let, including as a furnished holiday let, and/or
• where there’s restricted occupation

Buying for someone else (including minors)

Select this option if the buyer is purchasing on behalf of someone else, including but not limited to:

• a minor, and
• the buyer already owns a major interest in another dwelling

Buying in relation to a trust

Select this option if:

• a beneficiary of a bare trust or settlement trust would be treated as the buyer for LTT and be liable to the higher rate if they acquired the dwelling directly, or
• the buyer (or one of them) is a trustee for a settlement trust where the beneficiary is not entitled to:
  • occupy the dwelling(s) for life
  • income earned from the dwelling(s)

Further guidance onwards from LTTA/8180 Settlements and Bare Trusts

Transfer of equity (including with a mortgage)

Select this option if there’s a transfer of equity to the buyer and they own a major interest in another dwelling.

Other

Select this option if the transaction attracts a higher rate but not under any of the defined options above.

We’ve provided a text box to understand any reasons not listed.

Select one option.

For wholly residential transactions, the buyer should not be charged VAT.

The buyer may be charged VAT on non-residential transactions. If you’re unsure about whether VAT is being charged or not, you should consult the seller or your agent.

If the buyer is being charged VAT, answer ‘Yes’. Otherwise, answer ‘No’.

Select one option.

If ‘Yes’, give a brief description, for example:

• seller retains the right to buy back at less than market value
• lease covenants restrict the use of the shop
• agricultural occupancy conditions apply

Answer ‘Yes’ if this transaction results from an option being exercised.

An option to buy land is a binding right granted by a landowner. It gives a prospective buyer an entitlement to purchase that land before a specified date. In all other cases, answer ‘No’.

Further guidance about options

Answer ‘Yes’ if you asked for a tax opinion before the transaction took place, and we gave you a formal written response.

The tax opinion reference number will be shown on our formal written response. Enter the reference number in the space provided.

If you did not ask for a tax opinion, answer ‘No’.

Further information on WRA tax opinions

Answer ‘Yes’ if all of the following apply:

• there’s 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 arrangement or scheme or part of a series of transactions
• at least one of the transactions involves land outside the borders of Wales

Otherwise, answer ‘No’.

Further guidance on linked transactions

You need to answer ‘Yes’ if all of the following apply:

• there’s 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 arrangement or scheme or part of a series of transactions

Otherwise, answer ‘No’.

Further guidance on linked transactions

Enter the amount of consideration, chargeable in respect of all linked transactions, even if some of those linked transactions have already been reported on an LTT return in the past.

The amount you enter as consideration should include the following where appropriate:

• the total consideration in money or money’s worth given by the buyer in whatever form for the land or property
• the total consideration given for the assignments
• any premium
• if there’s a legal requirement for LTT to be paid on the market value, state the market value
• any VAT actually payable

Where the transaction involves a lease, it should not include rent.

Enter the amount rounded down to the nearest whole pound.

Further guidance on consideration

Enter the Unique Transaction Reference Number (UTRN) of any linked transactions that you’ve already reported to the WRA in the past. You’ll find the UTRN on the LTT Certificate.

If there’s more than one linked transaction in the past, include all the UTRNs.

If you’re notifying us of linked transactions with the same effective date, you should complete one return for all transactions. You can add additional land on the summary page for your draft return.

Further guidance on linked transactions

If none of the linked transactions involves rent in respect of non-residential or mixed-use land, answer ‘£0’.

If any of the linked transactions involve rent in respect of non-residential or mixed-use land, you must enter the total NPV of the rent payable over the terms of all linked leases to the nearest pound. To calculate this value, you’ll need to ascertain the NPV for each applicable transaction, as though they were not linked, and enter the sum of all NPVs.

You may find it helpful to use our tax calculator to calculate the NPV.

Answer ‘Yes’ if any of the consideration to be paid is contingent or uncertain. Otherwise, answer ‘No’.

Examples of contingent events include but are not limited to:

• £x additional amount is to be paid, if planning permission is obtained within x number of years
• £x additional amount is to be paid, if profits exceed x amount

Further guidance on contingent consideration 

Answer ‘Yes’ if the WRA has formally permitted you to defer LTT chargeable to contingent consideration.

Otherwise, answer ‘No’.

Further guidance on deferred payments

Answer ‘Yes’ if you’ve already submitted a return in respect of this transaction, and this return is a 'further return' that the buyer is obliged to file under LTT rules.

Examples:

• higher rates are due on an intermediate transaction, refer to guidance on higher rates
• a return has already been submitted in respect of the acquisition of an option, and a further return is now due in respect of the exercise of that option, refer to further information on options
• a return has been submitted in respect of a lease running for an indefinite period of time, and a further return is now due because the lease has run for another 12-month period, refer to further guidance about leases

These are not the only examples of why a further return may be due.

If this is not a further return, answer ‘No’.

Enter the Unique Transaction Reference Number (UTRN) of any linked transactions that you’ve already reported to the WRA in the past. You’ll find the UTRN on the LTT Certificate. 

Briefly state the reason why you’ve sent us a further return.

For example, ‘Paid main rate on a Buy to Let; the purchase of a main residence means that higher rate is now retrospectively due’.

Further guidance on linked transactions

If VAT is being paid, enter the amount of VAT paid, rounded down to the nearest pound.

The total VAT should be the sum total of:

1. VAT due on consideration other than rent, and
2. (NPV / (100 + Present VAT Rate)) X Present VAT Rate (VAT element of the NPV)

To illustrate how point 2 should be calculated, if the present VAT rate were 20% and the NPV was £100,000, then the VAT element would be £16,666, calculated as follows: (£100,000 / (100+20)) X 20 = £16,666.

Consideration ('payment') comes in forms other than money ('cash'). Most transactions will be wholly satisfied by payment in money. But if other types of consideration are involved in this transaction, you must show all types of consideration by selecting all appropriate options.

Tax is chargeable on the total of all forms of consideration in money or money’s worth. Consideration other than money must be valued at its full market value as at the effective date of the transaction.

Further guidance on chargeable consideration

If the buyer’s acquisition of the land is part of an agreement to purchase a business, you must answer ‘Yes’. Otherwise, answer ‘No’.

If the buyer is purchasing a business including land, consideration may have been made in respect of matters other than the land (for example, goodwill, stock).

If consideration is being given for anything other than the land, you must answer ‘Yes’.

Otherwise, answer ‘No’.

Select what the buyer has given consideration for, in respect of matters other than the land. Consideration given to such matters is not chargeable to LTT.

Enter the amount of consideration (in money or money’s worth, including VAT) given in respect of the matter that you indicated was not chargeable to LTT.

Enter the amount rounded down to the nearest pound.