Find out the main differences between Land Transaction Tax (LTT) and Stamp Duty Land Tax (SDLT).
This list is not a complete statement of the differences between LTT and SDLT.
You must check the relevant detailed guidance and legislation for LTT when you're involved with a land transaction in Wales from 1 April 2018.
| LTT | SDLT | |
|---|---|---|
| Rates and bands |
The Welsh Government sets the rates and bands for LTT. To calculate how much LTT to pay use our tax calculator. |
The UK government sets the rates and bands for SDLT. To calculate how much SDLT to pay use HMRC’s tax calculator. |
|
Higher rates: intermediate transaction rule |
The purchase of a new main residence will not be chargeable to LTT at the higher rate if a previous main residence was disposed of. However, if the seller purchases another property (for example buy-to-let) before completion of the purchase of a new main residence, the seller may be required to ‘look back’ to that intermediate transaction and pay the higher rates. |
SDLT does not apply an interim transaction rule. |
| Meaning of residential and non-residential | LTT has its own specific interpretation guidance. | SDLT also has its own specific interpretation guidance, found on the HMRC website. |
| Residential leases |
LTT is only payable on any premium (or other consideration) that does not consist of rent. Rent figures are not required when completing a return for a new residential lease. |
SDLT is charged on both rent and any premium (or other consideration) for a new residential lease. |
| Non-residential leases: relevant rent rule |
The 0% band for premiums (and other non-rent consideration) extends to £150,000. This band can increase to 1% where the ‘relevant rent’ exceeds £13,500. Relevant rent is usually the highest rent payable in any year across the entire term of the lease. |
SDLT does not apply a relevant rent rule. |
| Reliefs |
First-time buyer relief is not available. The 0% band currently applies to purchases up to £225,000. |
First-time buyer relief is available. The 0% band currently applies to purchases up to £250,000, or £425,000 for first time buyers. |
| Avoidance and compliance |
There's an anti-avoidance rule that applies to all LTT reliefs. The general anti-avoidance rule allows the WRA to counter any artificial tax avoidance arrangement. |
There are rules that target specific aspects of particular reliefs. The Sections 75A-C Finance Act 2003 anti-avoidance rules apply. |
| Deferral of tax | A taxpayer must supply an expected end date of the deferral and where one cannot be predicted use the 5th anniversary of the transaction. | The taxpayer need not supply an expected end date of a deferral period. |