Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 4 para 14

Indemnities given by the buyer to the seller

Schedule 4, paragraph 14 provides that where a buyer agrees to indemnify the seller against liabilities to third parties arising from the seller's own obligations relating to the land, this indemnity does not count as chargeable consideration for land transaction tax purposes.

• An indemnity is an agreement by the buyer to cover the seller's liability to a third party connected with the land being sold.
• The liability must arise from a breach of an obligation that the seller already owes in relation to the land.
• Neither the indemnity agreement itself nor any actual payments made under it count as chargeable consideration.
• This means such indemnities do not increase the amount on which land transaction tax is calculated.