Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 6 paragraph 35

Mixed leases: treatment of non-rent consideration

Schedule 6 paragraph 35 explains how to calculate the tax on non-rent consideration (such as a premium) paid for a mixed lease — one covering both residential and non-residential property — where the non-residential rent meets or exceeds a specified threshold.

• This rule applies to mixed leases where there is chargeable consideration other than rent and the rent attributable to the non-residential element meets or exceeds the specified amount.
• For the purpose of taxing the non-rent consideration, the transaction is split into two notional but linked transactions: one covering the residential land and one covering the non-residential land.
• Each notional transaction is taxed under the rules appropriate to its property type — residential rates for the residential portion and non-residential rates (as modified elsewhere in Schedule 6) for the non-residential portion.
• The non-rent consideration must be apportioned between the two notional transactions on a just and reasonable basis.