Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 Schedule 6 paragraph 5

Treatment of leases for an indefinite term

Schedule 6 paragraph 5 sets out how leases granted for an indefinite term (i.e. with no fixed end date) are treated for land transaction tax purposes, including the rolling annual treatment, return obligations, and the ability to amend returns if the lease terminates early.

• A lease for an indefinite term is initially treated as a one-year fixed-term lease, then as a two-year lease if it continues, then three years, and so on — each year adding one more year to the deemed fixed term.
• If the lease actually ends before the current deemed fixed term expires, it is only treated as continuing until its actual termination date, and the early termination rules apply.
• Each time the lease rolls into a longer deemed term and this results in additional or new tax being due, the buyer must file a return or further return within 30 days of the end of that longer deemed term.
• If the lease terminates within the initial one-year deemed term and less tax would have been due based on the actual shorter period, the buyer may amend the original return within the allowed amendment period.