Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Sch 15 para 15

Shared ownership trusts: default treatment where no market value election is made

Schedule 15 paragraph 15 sets out how the land transaction tax is calculated on a shared ownership trust where no election has been made to use market value treatment.

• This paragraph applies where a shared ownership trust exists and the buyer has not elected for market value treatment under paragraph 12.
• The initial capital payment made by the buyer is treated as chargeable consideration other than rent, meaning it is taxed as a lump-sum purchase price.
• Any ongoing rent-equivalent payments made by the buyer are treated as rent for land transaction tax purposes.
• This default approach splits the transaction into two components — a capital element and a rental element — each taxed according to the relevant rules.