Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 7 paragraph 18

Anti-avoidance: transfer of interest in partnership

Schedule 7 paragraph 18 is an anti-avoidance provision that catches arrangements where land is transferred into a partnership and then the transferor reduces or disposes of their partnership interest under pre-planned tax avoidance arrangements, treating the partnership interest transfer as a chargeable land transaction.

• Where land is transferred into a partnership and the transferor subsequently disposes of or reduces their partnership interest under pre-existing tax avoidance arrangements, the partnership interest transfer is treated as a chargeable land transaction even if it would not otherwise be one.
• The chargeable consideration is based on a proportion of the market value of the original land interest at the date of the partnership interest transfer, reflecting the share given up by the transferor.
• The partnership interest transfer and the original land transfer are treated as linked transactions, which means their values are aggregated for the purpose of determining the applicable tax rates.
• The partners remaining after the transfer, together with any person becoming a partner as a result of or in connection with the transfer, are jointly and severally liable as the responsible partners for the tax due.