Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 5 paragraph 37

Short leases excluded from "major interest" definition

Schedule 5 paragraph 37 defines when a lease is not considered a "major interest" for the purposes of the higher rates provisions in Schedule 5.

• A lease (term of years absolute or leasehold estate) may be excluded from counting as a "major interest" depending on its length.
• If the lease term is seven years or less at the date it is granted, it is not treated as a major interest.
• This exclusion is relevant because ownership of a major interest in a dwelling can trigger the higher rates of Land Transaction Tax.
• Short leases of seven years or fewer are therefore disregarded when determining whether a buyer holds a major interest in residential property.