Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Sch 4 para 16

Capital gains tax paid by buyer on non-arm's length transactions

Schedule 4 paragraph 16 deals with the treatment of capital gains tax liabilities borne by the buyer in non-arm's length land transactions, and whether such liabilities count as chargeable consideration for land transaction tax purposes.

• Where a buyer acquires a chargeable interest other than at arm's length, or the transaction is treated as such under connected persons rules, any capital gains tax the buyer pays on the corresponding disposal is not treated as chargeable consideration.
• This exclusion prevents a buyer's assumption of the seller's capital gains tax liability from inflating the amount on which land transaction tax is calculated.
• However, this relief only applies where there is no other chargeable consideration for the transaction — if any separate consideration exists, the exclusion does not apply.
• The provision specifically references section 18 of the Taxation of Chargeable Gains Act 1992, which deems transactions between connected persons to be made otherwise than at arm's length.