Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 17 paragraph 5

Withdrawal of reconstruction or acquisition relief on change of control

Schedule 17, paragraph 5 sets out when reconstruction or acquisition relief is withdrawn because there has been a change in control of the acquiring company within three years of the original relieved transaction.

• If control of the acquiring company changes within three years of the relieved transaction (or under arrangements made within that period), relief is withdrawn and tax becomes chargeable.
• Relief is withdrawn where, at the time control changes, the acquiring company or a relevant associated company still holds the chargeable interest acquired under the relieved transaction (or an interest derived from it), unless that interest has since been acquired at market value in a chargeable transaction where relief was available but not claimed.
• The tax chargeable on withdrawal is calculated as if the original consideration had been the market value of the property (plus any rent if the transaction was the grant of a lease), with only a proportionate amount being clawed back if the company only retains part of what was originally acquired.
• Certain exceptions exist under paragraph 6 of Schedule 17, which sets out cases where relief is not withdrawn despite a change of control.