Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 7 paragraph 31

Partnership transactions involving rent: calculating the chargeable proportion

Schedule 7 paragraph 31 sets out how the normal lease tax calculation rules are modified when a chargeable interest is transferred to or from a partnership and the consideration (or part of it) takes the form of rent.

• When rent forms all or part of the consideration for a transfer of a chargeable interest to or from a partnership, the standard lease tax calculation rules in Schedule 6 Part 5 are modified.
• Instead of taxing the full net present value (NPV) of the rent, only the "relevant chargeable proportion" of the NPV is brought into the tax calculation — this proportion equals 100% minus the sum of the lower proportions (SLP).
• The same adjustment applies to linked lease transactions and to the "relevant rent" used in determining whether non-rent consideration thresholds are exceeded, ensuring consistency across all elements of the lease tax computation.
• The SLP is determined under paragraph 14 for transfers into a partnership and paragraph 22 for transfers out; for transfers out, the rules are also subject to paragraph 30 (transfers from partnerships consisting wholly of bodies corporate).

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