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

The NPV of the rent payable over the term of a lease

Section 31 explains how to calculate the net present value (NPV) of the total rent payable over the term of a lease for Land Transaction Tax purposes.

• The NPV represents the current economic value of all future rent payments due over the entire lease term.
• Each year's rent is discounted back to present-day value using a temporal discount rate, reflecting the principle that money payable in the future is worth less than the same amount today.
• The calculation is applied year by year across the full term of the lease, from year one through to the final year.
• The temporal discount rate used in the formula is specified separately in paragraph 32 of the same schedule.