Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 6 paragraph 16

Tenant obligations that are not chargeable consideration on the grant of a lease

Schedule 6, paragraph 16 sets out a list of typical tenant obligations and costs that are excluded from being treated as chargeable consideration when a lease is granted, ensuring that routine lease obligations do not attract land transaction tax.

• Standard tenant obligations such as repairing, maintaining and insuring the premises, and paying service charges or the landlord's management costs, are not chargeable consideration.
• Guarantees of rent payment, penal rents for breach of lease obligations, and any tenant obligation that would not affect the rent payable on the open market are also excluded.
• Certain statutory costs borne by tenants exercising leasehold reform rights, the landlord's reasonable costs of granting the lease, and obligations to transfer farm payment entitlements back to the landlord on lease termination are all disregarded.
• Any actual payment made to fulfil one of these excluded obligations is itself not chargeable consideration, and releasing such an obligation on surrender of the lease is likewise not chargeable.