Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 7 paragraph 13

Transfer of chargeable interest to a partnership

Schedule 7 paragraph 13 sets out how land transaction tax is calculated when a chargeable interest in land is transferred to a partnership, whether on formation of the partnership or to an existing one.

• The rules apply when a partner, a person acquiring a partnership interest in return, or a person connected with a partner (or someone becoming a partner through the transfer) transfers a chargeable interest to the partnership.
• The chargeable consideration is calculated as the market value of the interest multiplied by the sum of the lower proportions (SLP) — a measure that broadly reflects the extent to which the interest has effectively changed hands.
• The partners responsible for the tax are those who were partners before the transfer and remain so afterwards, together with anyone who becomes a partner as a result of or in connection with the transfer.
• If the partnership is a property investment partnership, an election may be made to disapply these rules, and separate provisions apply where part or all of the consideration takes the form of rent.