From 1 April 2018, Land Transaction Tax will replace Stamp Duty Land Tax in Wales.
The Land Transaction Tax and Anti-Avoidance of Devolved Taxes (Wales) Bill was introduced to the Welsh National Assembly on 12 September 2016. The Bill has recently passed through Stage One of the legislative process. The Welsh Assembly Finance Committee produced a report which suggested a number of recommendations to the Bill, dealing mainly with implementation and guidance, but ultimately recommending that the National Assembly should agree to the general principles of the Bill. The General Principles debate took place on 10 January 2017, and the Bill proceeded to Stage Two the following day. The Bill is expected to receive Royal Assent this Spring. The rates for Land Transaction Tax (LTT) are unlikely to be announced until closer to April 2018 but will include higher rates for ‘additional’ residential purchases.
At Stages Two and Three, Assembly Members may begin proposing changes to the Bill. The amendments will be debated and voted on by the Welsh Finance Assembly Committee at Stage Two, and the whole of the Welsh Assembly at Stage Three. Once the last amendment is voted on, the Bill may pass to Stage Four.
At Stage Four, the National Assembly will vote on whether or not to pass the Bill. If approved, the Bill will then move into Post Stage Four, which is a mandatory four-week period between Stage Four and Royal Assent during which any challenges to the Bill receiving Royal Assent may be made. If no such challenges are made, the Bill will receive Royal Assent, on a date to be confirmed by the Clerk to the National Assembly, currently expected to be Spring 2017.
The rates at which LTT will apply are not expected to be announced until much closer to April 2018. However, following a consultation on the matter, it was confirmed that the tax will include higher rates for additional or buy-to-let property purchases, much like the recently introduced additional ‘surcharge’ rates of Stamp Duty Land Tax that have been in force since 1 April 2016.
For further information please do not hesitate to contact a member of the Stamp Taxes Team or your usual KPMG contact.
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