Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 4 paragraph 5

Exchanges of land: determining chargeable consideration

Schedule 4 paragraph 5 sets out how to determine the chargeable consideration when land transactions involve an exchange — that is, where a person buys property and the consideration for that purchase consists wholly or partly of that person selling other property.

• When an exchange involves a major interest in land (such as a freehold or lease), the chargeable consideration for each acquisition is based on its market value at the effective date, plus any rent if a lease is granted and any VAT chargeable.
• Market value must not be reduced by any arrangement whose main purpose (or one of its main purposes) is to avoid tax, whether carried out by the buyer or anyone else.
• When none of the properties exchanged is a major interest in land, the chargeable consideration is only the additional non-property consideration (such as cash) given on top of the exchange, apportioned by relative market value where there are multiple acquisitions.
• Special rules apply where the exchange involves partition of jointly owned land (paragraph 6) or arrangements with public or educational bodies (paragraph 18), which override or disapply this paragraph.