Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 7 paragraph 19

Anti-avoidance: transfers of chargeable interests to partnerships

Schedule 7 paragraph 19 sets out an anti-avoidance rule that can create an additional LTT charge when a chargeable interest (such as land or property) is transferred into a partnership, and a qualifying event connected with a tax avoidance arrangement occurs within three years of that transfer.

• Where a chargeable interest is transferred into a partnership under the partnership transfer rules, and a qualifying event occurs within three years that forms part of a tax avoidance arrangement, an additional LTT charge may arise.
• A qualifying event includes the relevant person withdrawing capital, reducing their partnership interest, ceasing to be a partner, or having a loan repaid by the partnership — provided it does not represent income profit.
• The chargeable consideration is based on the value withdrawn or repaid, but is capped at the market value of the property at the time of the original transfer, reduced by any amount already subject to tax.
• If the same event also triggers a charge under the property investment partnership rules, the charge under this anti-avoidance provision is reduced (but not below zero) by the amount of that other charge, preventing double taxation.