Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 5 paragraph 28

Interests held by beneficiaries under trusts

Schedule 5 paragraph 28 explains how dwelling interests held in trust are attributed to beneficiaries for the purpose of determining whether someone already owns a residential property (and therefore faces the higher rates of land transaction tax).

• Where a beneficiary under a settlement is entitled to occupy a dwelling for life or to receive income from it, the beneficiary is treated as holding that interest in the dwelling directly.
• Where a beneficiary under a bare trust holds a leasehold interest (a term of years absolute) in a dwelling as part of the trust property, the beneficiary is similarly treated as holding that interest directly.
• In both cases, if the trustee disposes of the interest in the dwelling, the beneficiary is treated as having made the disposal themselves.
• These rules ensure that property held through trust arrangements is counted when assessing whether someone owns an existing dwelling for higher rate purposes.