Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 7 paragraph 41

Reduction of tax charge where a connected company is in the same group as the original owner

Schedule 7, paragraph 41 provides a reduction in the land transaction tax charge when a chargeable interest is transferred into a partnership, and a connected company that is in the same corporate group as the original owner would have been treated as a corresponding partner but for the rule that only connected individuals (not companies) count for that purpose.

• When calculating the sum of the lower proportions on a transfer of a chargeable interest to a partnership, only connected individuals — not connected companies — are normally counted as corresponding partners.
• Where a connected company in the same corporate group as the original owner would otherwise have qualified as a corresponding partner, the tax charge is reduced to the amount that would have been due had that company been treated as a corresponding partner.
• This reduction is subject to the same group relief rules in Schedule 16 that apply to standard group relief, but with specific modifications geared to the partnership context.
• The modifications include treating the relevant partner (rather than the buyer) as the party whose group membership is tested, and applying the other partnership-specific adjustments set out in paragraph 40 of Schedule 7.