Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 6 paragraph 24

Treatment of lease variations as chargeable transactions

Schedule 6 paragraph 24 explains how certain variations to a lease are treated as acquisitions of a chargeable interest for land transaction tax purposes, depending on the nature of the variation and which party benefits from it.

• A reduction in rent under a lease is treated as an acquisition of a chargeable interest by the tenant.
• If the tenant pays consideration (other than increased rent) for a variation that does not change the rent or the term of the lease, the variation is treated as an acquisition of a chargeable interest by the tenant.
• A reduction in the term of a lease is treated as an acquisition of a chargeable interest by the landlord.
• These rules ensure that lease variations with economic substance are brought within the scope of land transaction tax.